Oil falls as China fuel exports jump, US rigs rise

Oil prices fell nearly 3 percent on Monday as China ramped up exports of refined products, US oil producers added rigs for an eighth consecutive week, and prospects emerged for increased exports from Iraq and Nigeria. Brent crude futures LCOc1 were trading at $49.39 per barrel at 1028 GMT, down $1.49 from their last close.

US West Texas Intermediate (WTI) crude Clc1 was down $1.27 at $47.25 a barrel.

China's July exports of diesel and gasoline soared by 181.8 and 145.2 percent respectively compared with the same month last year, putting pressure on refined product margins.

Because of the production and storage overhang in fuel markets, Barclays said a 20 percent price rally seen in August was unwarranted and that oil prices of $50 or higher were unsustainable.

"Oil prices will likely experience another short-term dip in the coming weeks," it added.

Adding to the bearish sentiment, US drillers added 10 oil rigs in the week to Aug. 19 as crude rebounded towards the key $50 mark that makes a return to the well pad viable.

"We expect the oil market next year to be somewhere between balanced and up to as much as 1 million barrels per day (bpd) in deficit," Bjarne Schieldrop, chief commodity analyst at Nordic bank SEB, said.