SINGAPORE - Oil prices were steady on Wednesday after climbing about 3 percent in the previous session as expectations that OPEC-led supply cuts can tighten market fundamentals offset signs of a global economic slowdown.
International Brent crude oil futures were at $60.68 per barrel at 0703 GMT, 4 cents above their last close.
U.S. West Texas Intermediate (WTI) crude futures were up 2 cents from their last settlement, at $52.13 a barrel.
"It seems the oil market is looking at Saudi Arabia's aggressive supply cuts and Chinese aggressive stimulus," said Jonathan Barratt, chief investment officer at Probis Securities in Sydney.
China's central bank on Wednesday made its biggest daily net cash injection via reverse repo operations on record, more evidence that authorities are shifting to policy easing to counter a slowdown in Asia's biggest economy.
Earlier this week, China reported poor December trade data, with both exports and imports contracting from a year earlier.
"Situation of a developing shortage might arise if the Sino-U.S. trade war goes away, the Chinese economy kicks into gear, Brexit is solved and the United States make good threats on Iran," Barratt said.
Oil prices on Wednesday, however, were prevented from rising further as signs of economic slowdown mounted elsewhere across the globe.
In Japan, core machinery orders slowed sharply in November in a sign corporate capital expenditure could lose momentum as a bruising U.S.-China trade war spills into the global economy.
Meanwhile, the U.S. economy is taking a larger-than-expected hit from a partial government shutdown, White House estimates showed on Tuesday, as talks to end the impasse seem stalled.
The outlook for the global economy darkened further when British lawmakers on Tuesday overwhelmingly rejected Prime Minister Theresa May's deal to leave the European Union.
OPEC CUTS SUPPORT CRUDE
Oil markets are receiving support from supply cuts started late last year by producer group the Organization of the Petroleum Exporting Countries (OPEC) and major non-OPEC producer Russia.
OPEC and its allies will meet on April 17-18 in Vienna to review their oil supply cut deal, and the panel is to be chaired by Saudi Arabia and Russia.
However, surging U.S. crude oil production, which hit a record 11.7 million barrels per day (bpd) late last year, threatens to undermine the OPEC-led efforts.
With so much uncertainty around demand and supply, the outlook for oil markets is unclear.
Oil prices are expected to oscillate close to current levels, according to a large annual survey of energy professionals conducted by Reuters between Jan. 8 and 11, with Brent prices in 2019 expected to average $65 per barrel, unchanged from surveys in 2016, 2017 and 2018.
"The oil market remains amply supplied and prices are set to trade rangebound," said Norbert Ruecker, head of commodity research at Swiss bank Julius Baer.