Oil prices have fallen for the second consecutive day due to the Chinese yuan value sliding further after authorities devalued the currency to support its struggling export.

Brent futures fell 30 cents at $48.88, while the US crude futures were at $42.87 per barrel, Reuters reported.

The news agency quoted Macquarie saying in a note to clients: "It is China, the largest consumer of most commodities and a large producer of many, and it’s the yuan, which rarely moves much against the US dollar and when it does, it traditionally appreciates not depreciates."

"The yuan rarely moves much against the US dollar and when it does, it traditionally appreciates not depreciates."

In order to boost the weakening economy, China needs to take action as the majority of data released for the last month was weaker, which is against economists’ forecast.

Morgan Stanley believes that the government will continue to ease policy to stabilise sluggish aggregate growth in demand.

The Organization of the Petroleum Exporting Countries (OPEC) report highlighted that the cartel produced 31.51 million barrels per day (bpd) in July, which represents 1.5 million bpd more than its 30-million-bpd target.

The production from the oil cartel reached three year high despite major oil producer Saudi Arabia scaled down its oil production.

Saudi Arabia’s oil production dipped to 10.4 million barrels a day in July compared with 10.6 million in June.