Oil prices have dropped due to Japan’s economy shrinking following a decrease in exports and consumer spending.
Brent futures declined 50 cents and traded at $48.69 a barrel, while the US crude was trading at $42.07 per barrel at 0012 GMT, 43 cents below its last settlement, Reuters reported.
In April-June, a slump in exports and reduction in spending by consumers led to the contraction of Japan’s economy at an annualised pace of 1.6%.
According to analysts, the fall in China, the Asia’s biggest economy, as well as its impact on the region has also increased the chance that any rebound in growth during July to September months will be modest.
ANZ bank told the news agency: "OPEC is expected to boost crude oil production to 33 million barrels day, the most ever, after international sanctions are removed against Iran.
"Oman, the biggest non-OPEC oil producer in the Middle East, has also increased its production. Oman pumped one million barrels per day in July, a 0.5% increase from June’s daily output level."
Oil production in countries, including Russia and the US also remains near records, adding pressure to the oversupplied market.