Oil fell on Tuesday as rising output from the Middle East and North Sea renewed concerns about a global supply overhang while economic data painted a negative outlook for the demand outlook.

Brent crude futures were trading 44 cents lower at $45.39 a barrel at 1101 GMT, retreating from earlier gains.

US crude futures were down 54 cents at $44.24 a barrel.

Iraq said its oil shipments from southern fields averaged 3.364 million barrels per day (bpd) in April, up from 3.286 million in March.

Production from top exporter Saudi Arabia was 10.15 million bpd in April, but sources said that it could soon return to a near-record level of 10.5 million bpd.

Iran is also raising output after its emergence from Western sanctions in January and has increased exports to almost 2 million bpd from a little more than 1 million bpd at the start of the year.

Daily supply of North Sea Brent crude oil, which contributes to the futures benchmark, will rise in June to its highest in four months, up 17 per cent from May, according to monthly loading programmes provided by trading sources.

"There are enough supply stories out there to slow or temper any gains," Energy Aspects analyst Richard Mallinson said, though he added that lower supply from the United States should support prices in the longer term.

Demand worries are also back on the horizon, stoked by a 14th straight months of decline in Chinese factory activity in April. British manufacturing output, meanwhile, dropped to a three-year low and euro zone growth was forecast to be slower than previously this year.

US production has dipped from a peak of about 9.6 million bpd in June 2015 to less than 9 million bpd now, government data shows.

That had helped to lift crude by nearly 70 per cent from decade lows hit early this year and analysts said that further sporadic price falls are likely given the spike, including Brent crude's biggest monthly gain in seven years last month. – Reuters