Oil market: The global economy is in focus

Oil prices vary in thin trading on Wednesday due to U.S. benchmark rebounded from the sharp decline in the previous session, although concerns about the health of the global economy continued to overshadow the market in the long run.

US West Texas Intermediate (WTI) crude futures rose 29 cents, or 0.68 percent, at $ 42.82 per barrel, at 0355 GMT, at one point rising as high as 2 percent from the last close. They have slumped 6.7 percent in the previous session to $ 42.53 per barrel – the lowest since June 2017.

Meanwhile Brent crude oil futures fell 11 cents, or 0.22 percent, at $ 50.36 a barrel, after slipping 6.2 percent in the previous session to $ 50.47 a barrel, the weakest since August 2017.

"$ 50 is a level of psychological support (for Brent)," said Margaret Yang, market analyst at CMC Markets in Singapore.

"But market confidence needs to be restored for oil prices … which includes a rebound in equity markets and / or a greater reduction in production from major oil exporters," Yang said, referring to the OPEC-led agreement to reduce production starting next month.

Wider financial markets have been under pressure on concerns about a global economic slowdown amid higher US interest rates and US-China trade disputes.

"US equity futures traded slightly stronger this morning triggering little buying interest in the oil market," said Stephen Innes, head of trading for the Asia-Pacific futures broker Oanda in Singapore.

But Innes added that macroeconomic concerns will continue unless the Organization of Petroleum Exporting Countries (OPEC) "reassures the market of the continuation of their supply cuts and even imposes deeper ones as some members suggest". OPEC and allies led by Russia agreed this month to cut oil production by 1.2 million barrels per day from January.

Russian Energy Minister Alexander Novak said on Tuesday that oil prices would be more stable in the first half of 2019, supported by efforts by OPEC and non-OPEC countries to cut production.

Elsewhere, US political turmoil triggered by partial closure of the federal government also added to market concerns. President Donald Trump said on Tuesday that a closure could take place until his request for money for the US-Mexico border wall is met.