Investing.com - Oil prices dropped on Tuesday in Asia mid continued worries on demand.
U.S. Crude Oil WTI Futures were down 0.2% to $54.84 by 12:47 AM ET (04:47 GMT). International Brent Oil Futures also dropped 0.2% to $58.45.
Oil prices received support late last week amid reports that Saudi Arabia would not tolerate the current decline in prices and was considering all options to deal with it.
Despite the gains, crude prices still ended 2% lower last week and plunged more than 6% so far in August amid concerns surrounding the escalating U.S.-China trade war that could potentially dent oil demand.
U.S. President Donald Trump said last week that he was "not ready" to make a trade deal with China.
On Tuesday, the People's Bank of China lowered its official yuan midpoint for the ninth straight day to 7.0326 per dollar.
A lower yuan increases the cost of dollar-denominated oil imports in China, the world's biggest crude oil importer.
Meanwhile, Analysts warned that efforts by OPEC to deal with oversupply by curbing production may be insufficient.
"Non-OPEC supply growth next year will mean OPEC will probably have to take further action or face the risk of lower oil prices," commodity strategists at ING said in a note.
Investing.com senior commodity analyst Barani Krishnan noted that confidence looked fragile, saying "it could take just another U.S. stockpile build or Chinese buying of Iranian crude to send the market into a tailspin."
Traders now await weekly oil inventory data from the U.S. Energy Information Administration, which is expected to report a crude stockpile draw of 2.9 million barrels in its data for the Aug. 9 week, just as they did during the week to Aug. 2.