Oil prices have fallen this morning after a rise in US crude inventories and ongoing high output from OPEC producers revived concerns of a fuel supply overhang.
Brent crude futures, the international benchmark for oil prices, were at $48.64 per barrel at 7.13am Irish time, down 20 cents, or 0.4%, from their last close.
US West Texas Intermediate (WTI) crude futures were at $46.22 per barrel, down 18 cents, or 0.4%.
US crude stocks rose last week, adding 1.6m barrels in the week to 14 July to 497.2m barrels, industry group the American Petroleum Institute said yesterday.
Outside the US, supplies from the Organization of the Petroleum Exporting Countries (OPEC) remained high, largely because of rising output from member-states Nigeria and Libya, despite the club's pledge to cut production.
"Production in Libya is currently reported at or above 1m barrels per day, while August loading schedules for Nigeria have risen to just over 2m barrels per day," BNP Paribas said.
The French bank said that the rising output from Nigeria and Libya eroded 40% of the 1.25m barrels per day cut by other OPEC members since the beginning of the year.
A Saudi Arabian industry source said on Tuesday that the kingdom, which is by far OPEC's biggest producer, was committed to tighten the market.
"We hope to accommodate the rise in production from Libya and Nigeria taking into consideration other supply adjustments as well. But we emphasise that we have to work together with other producers and with the two countries," the source said.
Nigeria and Libya are exempt from the deal between OPEC and other producers, including Russia, to cut production by around 1.8m barrels per day between January this year and March 2018 .
"Talk of capping Nigerian and Libyan output has been growing fast (within OPEC). But it is very unlikely that both countries will acquiesce to a cap so soon after restoring production," BNP said.
On the demand side, BMI Research warned that China's near record refinery use of crude oil in June would likely fall in the second-half of the year.
"The pace of refining throughput growth in China is set to ease in H2, as the Chinese economy loses steam amid intensifying efforts to curb financial risks, and utilisation rates at the independent private refineries soften amid lower quotas and a tighter regulatory environment," BMI said.