Oil prices fell yesterday as analysts doubted upcoming producer talks would rein in oversupply, saying that Brent would likely fall back below $50 a barrel as August’s more than 20 per cent crude rally looks overblown.

Soaring exports of refined products from China also pressured prices, as this was seen as the latest indicator of an ongoing global fuel glut, traders said.

China’s July exports of diesel and gasoline soared by 181.8 and 145.2 per cent respectively compared with the same month last year, to 1.53 million tonnes and 970,000 tonnes each, putting pressure on refined product margins.

Brent crude futures were trading at $49.93 per barrel at 0641 GMT, down 95 cents, or 1.87 per cent.

US West Texas Intermediate (WTI) crude was down 84 cents, or 1.73 per cent, at $47.68 a barrel. Analysts cast doubt on an August price rally, saying much of it was a result of short-covering and anticipation of upcoming producer talks to discuss means to curb oversupply.

“Positioning data seems to confirm our view that the latest oil bounce is more technical and positioning-oriented than fundamental. In fact, new buyers have been mostly absent the past few months,” Morgan Stanley said.

Regarding the upcoming producer talks, the bank said an agreement was “highly unlikely” and that there were “too many headwinds and logistical challenges to a meaningful deal”.

Members of the Organisation of the Petroleum Exporting Countries (Opec) and other producers like Russia are set to meet in September to discuss a freeze in output levels in order to rein in oversupply, but analysts said animosity between OPEC-members Saudi Arabia and Iran made a deal unlikely.