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European shares rose in early trade, buoyed by an 8 percent jump
in Japanese stocks and the prospect of more stimulus from Chinam
soothing investors rattled by recent market turmoil.
Yet concerns remained over the combination of high global oil
production and weakening demand growth, especially as growth in
China slows.
Brent crude was trading at $48.92 a barrel at 1127 GMT, down 60
cents from the previous evening's close, after climbing 4
percent in the previous session.
U.S. West Texas Intermediate crude was trading 70 cents lower at
$45.24, having falling in the previous session as the end of the
U.S. summer driving season pointed to lower fuel consumption.
Tamas Varga, of oil brokerage PVM, said that strong stock
performance had kept prices from falling further, but that
support is likely to be temporary.
"The oil market is still oversupplied," Varga added.
Oil prices have fallen by more than 50 percent since June 2014
because of the global supply glut, though prices have see-sawed
in recent weeks on concerns about Chinese growth and a slide in
its equity markets.
Analysts said the relatively stable trading prices on Wednesday
came as the market awaited more fundamental data, such as the
monthly short-term energy outlook due from the U.S. Energy
Information Administration later in the day.
"We've seen a little bit of a temporary quietness after the wild
swings of last week," said Richard Mallinson, analyst at Energy
Aspects. "People are trying to get a clear picture of the
signals."
While crude oil production in Saudi Arabia dipped by 100,000
barrels per day (bpd) in August, the Organization of the
Petroleum Exporting Countries (OPEC) was still producing close
to record volumes to squeeze out competition, especially from
U.S. shale producers.
There was also news that Russia and Mexico would not cut
production, cooling speculation that some producers might lower
output to support prices.
On Wednesday Britain's oil and gas industry association said
that the country's output in 2015 would rise for the first time
in 15 years, reflecting investment in more efficient technology.
(Additional reporting by Henning Gloystein in Singapore; Editing
by Jason Neely and David Goodman)
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