Dubai: Oil prices are falling amid concerns over Iran’s plans to re-enter the international market and China’s continuing economic slowdown.

Benchmark Brent crude dipped below $50 a barrel on Tuesday to $49.60 before rebounding. Brent showed signs of stability in May and June when prices sat between $60 and $70 a barrel after collapsing from a June 2014 high of $117 to a low this year of $45 in January. But after Tuesday’s drop, market watchers now see prices sliding closer towards $45 before any sort of rebound.

“The pressure is downwards … $50 and potentially below is certainty on the cards,” Nasser Saidi, founder and president of Nasser Saidi & Associates and former chief economist at Dubai International Financial Centre, told Gulf News by phone from Lebanon.

Edward Bell, Commodities Analyst, Global Markets & Treasury at EmiratesNBD, told Gulf News by phone “the low levels we hit earlier this year are reasonable.”

On Monday, data showed Chinese factory activity declined in July greater than initially anticipated. While the head of the Organisation for Petroleum Exporting Countries (Opec) suggested last Friday the group that controls a third of the world’s oil output would not be cutting-back in production.

“The pressure on the supply side is very strong … [and] with the [economic] slowdown particularly in China and the switch from heavy industry and energy intensive industries to consumer orientated and less energy intensive demand has gone down,” Saidi said.

Shwan Zulal, director of London-based Carduchi Consulting, told Gulf News by phone from England this could lead to price war.

“The competition for the Chinese market is getting fiercer. You’re probably going to see more discounts to Asia,” Zulal, also an associate fellow at King’s College, said.

Opec, led by Saudi Arabia, showing no signs of stepping back from its 30 million barrels per day production target, has been pushing out an extra 2 million barrels as its members continue to favour market share over a curb in production.

“There is still very, very large amounts of Opec oil, particularly coming out from Iraq where production has exceeded over 4 million barrels per day for two months in a row. We also had in July the announcement of the nuclear Iran deal, which means there is going to be a return of Iranian oil,” Bell said.

Oil rig count in the United States, who over took Saudi Arabia as the world’s largest oil producer in 2014, is also adding to the glut despite their greater sensitivity to weak oil. The count increased by five to 664 last week, according to oilfield services company Baker Hughes Inc.

Meanwhile, the economic slowdown and glut is exacerbating a seasonal lull in prices with demand for heating in Western Europe and North America down until the winter.

“For the moment there is just nothing to support [the oil price],” Gary Dugan, Chief Investment Officer at the National Bank of Abu Dhabi (NBAD), told Gulf News by phone.

However, he believes “it’s a matter of weeks before we see a good recovery.”

“There will come a point where we will get better news in terms of governments helping their economies recover,” Dugan said.