Oil drops as market awaits news on trade talks, oversupply concerns weigh

US oil prices fell for a second day on Tuesday, weighed down by uncertainty over whether US-China trade talks are making much progress, while higher Saudi Arabian crude output reinforced concerns about oversupply.

US West Texas Intermediate (WTI) crude was down 18 cents, or 0.3%, at $56.68 a barrel. The contract dropped 0.7% in the previous session.

Brent crude futures were down 14 cents, or 0.2%, at $62.04 a barrel by 0256 GMT, after falling 0.5% on Monday.

Worries about the impact on oil demand from the fallout of the 16-month US-China trade war, which has weighed on global economic growth, have returned after doubts were cast on the chances of a so-called phase one agreement.

US President Donald Trump said on Saturday that talks with China were moving along "very nicely" but the United States would only make a deal if it was the right one for Washington. He also there had been incorrect reporting about US willingness to lift tariffs.

On the supply side, Saudi Arabia raised its oil output in October to 10.3 million barrels per day (bpd), although it kept its supplies to oil markets below its OPEC output target.