Oil prices fall on rising Middle East output, Asia demand concerns
Oil prices fell over 1% on Wednesday as production from major Middle East exporters was expected to remain high or even increase just as concerns over the state of China's economy weighed on its fuel demand outlook, Reuters reported.
Brent crude futures were trading at $49.29 per barrel at 0649 GMT, down 60 cents, or 1.2%, from their last settlement, according to the report.
U.S. crude futures were down 51 cents, or 1.04%, at $48.59 a barrel.
Traders said that the falls were a result of the prospect of rising output from Middle East members of the Organization of the Petroleum Exporting Countries (OPEC), which meets this week to discuss market policy.
Most analysts said OPEC will continue to focus on defending market share instead of propping up prices by controlling output, Reuters writes.
"Many OPEC members ... have plans to grow, so cutting supply now may interfere with those objectives," Morgan Stanley said.
Many Middle East oil producers have ramped up their supplies to Asia in an aggressive fight for market share.
But on the demand side, Morgan Stanley said it was worried about China, as noted in the report.
"Our economists worry that April data showed China may be slowing ... The oil demand data from China should reinforce those concerns," the bank said.
Read alsoChina's CNPC interested in building up stake in Russia's RosneftBarclays said there were also signs of "investor fatigue" in oil markets following months of heavy inflows, according to the report.
A Reuters poll showed that most traders expect only limited potential for further price gains this year.