Mubasher: Oil prices steadied on Wednesday after surging around 3% in the prior session as hopes that the supply cuts led by the Organization of Petroleum Exporting Countries (OPEC) could tighten market fundamentals and wipe out signs of a global economic slowdown.  

By 8:26 am GMT, international benchmark Brent futures rose 0.31% to $60.83 per barrel (pb), US Nymex crude futures went up 0.10% to $52.16 pb.

China’s central bank on Wednesday injected its largest daily net cash via reverse repo operations on record, heralding further that the government is shifting to policy relaxing to face a slowdown in the world’s second biggest economy.

China reported this week soft trade data for December 2018, as both exports and imports shrank year-on-year.

“It seems the oil market is looking at Saudi Arabia’s aggressive supply cuts and Chinese aggressive stimulus,” Sydney-based Probis Securities chief investment officer Jonathan Barratt told Thomson Reuters.

Oil markets received support from supply cuts which started late last year by OPEC-led producer group, including major producer Russia.

The producer club is set to meet on 17 and 14 April in Vienna to review their production cut agreement, where the panel will be chaired by Saudi Arabia and Russia.

However, oil gains were capped as indicators of a sluggish global economic growth mounted.

In Japan, growth of core machinery orders lost pace last November, in a sign that corporate capital spending could slow down as a bitter US-China trade conflict spills into the global economy.

Moreover, the US economy is receiving a bigger-than-expected blow from a partial government shutdown, White House estimates indicated on Tuesday, as talks to end a deadlock seemed stalled.

The outlook for the global economy was dimmer as the UK parliament on Tuesday overwhelmingly rebuffed Prime Minister Theresa May’s plan to depart from the European Union (EU).

 The outlook for oil markets remained unclear, amid the uncertainty around demand and supply.

Oil prices are set to fluctuate near current levels, according to Reuters’ annual survey of energy professionals conducted between 8 and 11 January.

“The oil market remains amply supplied and prices are set to trade rangebound,” Swiss bank Julius Baer commodity research head Norbert Ruecker told the news agency.