Global benchmark Brent was up 0.85 percent, or 49 cents, at $56.75 per barrel.
U.S. oil prices rose on Wednesday to claw back part of their more than 5 percent losses from the previous session, with worries about oversupply and a slowing global economy keeping markets under pressure. U.S. crude oil had climbed 37 cents, or 0.8 percent, to $46.24 per barrel by 0122 GMT, after plunging 7.3 percent the day before in a session when it touched its lowest since August last year at $45.79. Global benchmark Brent was up 0.85 percent, or 49 cents, at $56.75 per barrel.
It dropped 5.62 percent on Tuesday, at one point marking a 14-month low of $56.16 a barrel. “The toxic combination of oversupply worries and global growth distress should see oil prices languish into year-end as negative momentum is leading price action,” said Stephen Innes, head of trading for Asia-Pacific at OANDA. U.S. crude stocks rose unexpectedly last week, while gasoline inventories increased, industry group the American Petroleum Institute said on Tuesday.
If the build in crude stockpiles is confirmed by U.S. government data Wednesday, it will be the first increase in three weeks. Meanwhile, analysts said that upcoming output cuts led by the Organization of the Petroleum Exporting Countries (OPEC) had so far failed to stimulate the market as they were not due to kick in until next month. Output from de facto OPEC leader Saudi Arabia as well as the United States and Russia – leading producers outside the group – has been at or near record highs.
The U.S. government has said shale production is expected to climb to over 8 million barrels per day (bpd) for the first time on record by the end of December. Russian oil output hit a record 11.42 million bpd this month, an industry source told Reuters. However, there were some factors tightening supply, with Libya’s state oil company declaring force majeure at the country’s largest oilfield. That came a week after the firm announced a contractual waiver on exports from the field following its seizure by protesters.
Elsewhere, a speech marking 40 years of market liberalisation by Chinese President Xi Jinping offered no specific support measures for the second largest economy, disappointing investors who were expecting fiscal policy loosening and a tax cut.
China’s Shanghai crude futures fell 5.95 percent in tandem with Brent’s decline overnight to trade at 388.9 yuan ($56.41) per barrel on Wednesday, the lowest level since their launch in March. Oil market investors were also turning their attention to the outcome of a two-day meeting of the U.S. Federal Reserve that is due to end on Wednesday.