Oil prices fell on Tuesday from a two-week high, weighed down by concerns about rising supplies and some caution over the chances of a long-term deal.

Brent crude futures were down 11 cents, or 0.2%, at $64.85 a barrel by 0510 GMT. U.S. West Texas Intermediate (WTI) crude futures were down 8 cents, or 0.1%, at $61.87.

Both benchmarks closed about 1.5% higher on Monday in their steepest finish since April 28. The gains come during a turbulent time for global oil markets.

The U.S. and China agreed to cut steep tariffs for at least 90 days, sending Wall Street stocks, the dollar and crude prices sharply higher on Monday. "While the easing of trade tensions between China and the US is beneficial, there is still a lot of uncertainty about what will happen in 90 days. This uncertainty could continue to pose a drag on oil demand," ING analysts said in an email to clients.

The underlying divisions that caused the dispute remain, including the US trade deficit with China and US President Donald Trump's demands that Beijing take more action to combat the US fentanyl crisis.

"There remains high uncertainty around the future course of US-China trade negotiations in the 90-day break and beyond, given the substantial differences between China and the US on several fundamental issues," UBS Chief China Economist Wang Tao wrote in a client note.

The market is looking to rising supply as a key driver of oil price weakness. "While demand has been a major concern for the oil market, the increase in supply from OPEC+ means that the oil market will be well supplied through the end of this year," ING analysts said, adding that how well supplied the market is will depend on whether OPEC+ sticks to its plan for aggressive supply increases in May and June.

The Organization of the Petroleum Exporting Countries (OPEC) has raised oil output more than previously expected since April, with May output likely to rise by 411,000 barrels per day.

The price decline, however, was limited by some signs that refined fuel demand remains strong.

"Despite the worsening crude demand outlook, positive signals from the fuel market cannot be ignored. Although international crude prices have fallen 22% since their peak on January 15, both refined product prices and refining margins have remained stable," JP Morgan analysts said in a note.

Reduced refining capacity - mostly in the US and Europe - is tightening gasoline and diesel balances, increasing reliance on imports and increasing vulnerability to price spikes during unplanned maintenance and outages, they added. Complex refining margins in Singapore nearly doubled in May, averaging $6.60 a barrel this month, up from $3.65 in April, LSEG price data showed. (Newsmaker23)

Source: Reuters