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

International benchmark Brent crude futures were trading at $50.37 per barrel early on Monday, down 51 cents, or 1%.

US West Texas Intermediate crude futures were down 29 cents, or 0.6%, at $48.23 per barrel.

Analysts cast doubt on a recent oil price rally, saying that much of it was a result of short-covering and anticipation of upcoming producer talks in September to discuss means to curb ballooning 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," US bank Morgan Stanley said.

Regarding the upcoming producer talks, the bank said that it viewed a meaningful "agreement as highly unlikely" and that there were "too many headwinds and logistical challenges to a meaningful deal".

Members of Opec and other oil producers such as Russia are set to meet in September to discuss a freeze in output levels or even a cutback in order to rein in on oversupply, but analysts said animosity between Opec-members Saudi Arabia and Iran made a deal unlikely.

"Though Iran now sits roughly 200,000 barrels per day away from its monthly pre-sanctions peak in May 2011, we do not see it accepting restraints on its output, and without Iran's inclusion, Saudi Arabia will not take part," Barclays bank said.

As a result, the British bank said that "the stars remain misaligned for an Opec/non-Opec freeze agreement".

Because of the ongoing production and storage overhang in crude and refined products markets, Barclays said that the 20% price rally since early August was unwarranted, and that oil prices of $50 or higher were currently "unsustainable".

"Oil prices will likely experience another short-term dip in the coming weeks, in our view, before more sustainably moving to average $50 in Q4," it added.