On Wednesday, oil steadied following its biggest declines for years. However, it stayed under pressure from concerns such as oversupply and slowdown in the global economy, weakening the demand for fuel.
As of 0840 GMT, there was a 30-cent increase in the Benchmark Brent crude oil at $56.56 a barrel. This followed after it made a 5.6% decline on Tuesday, just one point close to hitting a low for 14 months.
Meanwhile, the US light crude increased 20 cents at $46.44 after it made a drop of 7.3% in the last session with its lowest recorded hit dated back August 2017.
There was a 30% decline for both benchmarks since the start of October as the crude supply from Russia, the Middle East, and the United States surpassed demand, filling oil tanks.
“The market is experiencing price carnage, maximum pain, and considerable downside pressure. The trend is down,” said London brokerage PVM Oil Analyst Robin Bieber.
The sharp decline in the global stock markets urged a sell-off on Tuesday. This followed after the slowdown signals seen in economic growth and energy demand.
On Wednesday, the US Federal Reserve is likely to increase an additional hike in its interest rate. The central bank’s announcement of its decision is expected to happen around 2 p.m. EST (1900 GMT).
Meanwhile, American Petroleum stated on Tuesday that there was a sudden increase in the US crude stocks last week as well as in gasoline inventories. However, further added worries about oversupply.
Once the US government data confirmed the build in the US crude stocks, it will be the first increase in three weeks.
For this month, the Organization of the Petroleum Exporting Countries and other oil producers and Russia decided to trim output by 1.2 million bpd to drain tanks and advance prices.
However, the cuts are not expected to happen until next month. The production was near to record highs in Russia, Saudi Arabia, and the United States.
According to an industry source, the oil output of Russia is at a record 11.42 million bpd for this month.
As per Washington, there should be an 8 million bpd surge for the shale production for the first time at the last weeks of December.