Oil prices have edged-up due to the psychological mark of $50 a barrel on Tuesday looming production glut and China’s weakening economic outlook.
In the last few days, oil prices were under pressure due to abundant supply and a weakening of the demand, reaching six month low.
China’s factory-floor activity on Monday dipped, adding to worries about the struggling stocks of the country.
A survey by Reuters in July found that oil output from the Organization of the Petroleum Exporting Countries (OPEC) reached the highest monthly level.
The prices could be under further pressure as additional oil supply would come to market after Iran’s nuclear deal with world powers.
In November 2014, OPEC decided to defend market share by not reducing production volume despite oil glut, to support the prices. Instead the cartel continued to pump record volume.
This led to an increase in production by more than 1.7 million barrels per day (bpd) which represents a 6% increase.
According to BMI Research, a strong US dollar, a slowing of China’s economy and the prospect of increasing Iranian oil exports would continue to put downward pressure on the prices.