Oil prices rose about 2percent on Tuesday, along with world stock markets, supported by China’s plan to introduce policies to stabilize a slowing economy, reversing the previous session’s losses due to grim data in the world’s second-largest economy.
Brent crude was up $1.04, or 1.7 percent, at $60.03 per barrel by 12:02 p.m. EDT (1702 GMT).
U.S. crude futures rose $1.23, or 2.4 percent, to $51.74 a barrel. Earlier in the session, the contract touched a session high of $52.18 a barrel, according to Reuters.
“Some of the fears about the economic slowdown in 2019 seem to have ebbed away,” said Gene McGillian, director of market research at Tradition Energy in Stamford, Connecticut. “The market is latching on to news that suggests that the economy may be better than thought,” Reuters quotes McGillian as saying.
China’s National Development and Reform Commission offered some support on Tuesday, signaling it might roll out more fiscal stimulus. This countered negative sentiment from Monday when crude prices fell more than 2 percent after data showed weakening imports and exports in China.
Output cuts from the Organization of the Petroleum Exporting Countries and other producers, including Russia, also have begun to reduce fears of oversupply. The group known as OPEC+ agreed in late 2018 to cut supply starting this month, seeking to rein in a global glut.
The bloc and its allies set a meeting for March 17 to 18 to monitor implementation of their pact, sources told Reuters, and another on April 17 to 18 on whether to extend cuts beyond the agreed six months.
Further support has come from data showing the number of U.S. rigs drilling for new oil dipped slightly to 873 in early 2019, and a Reuters poll on Monday found that U.S. crude oil stockpiles were likely to have fallen last week.
The rig data could signal a slowing of the swift rise in output from the United States, which became the world’s top oil producer in 2018.
The market also found support in news that the U.S. will not grant further waivers to its sanctions on Iran.
According to Reuters, U.S. Special Representative for Iran Brian Hook said on Saturday that Washington was not looking to grant any more waivers for Iranian oil after the reimposition of U.S. sanctions. The move could limit Iranian oil coming the market in coming months.
Such positive signals and hopes for renewed U.S.-China talks to resolve trade tensions have boosted world stock markets and oil prices, but fears about global growth weigh heavily.
“It would seem that the market is having a rather hard time making up its mind as to which story to believe in,” consultancy JBC Energy told Reuters.