Oil prices rose on Wednesday as US crude stocks fell and official data indicated slowing growth in US shale oil output in the coming years.
A widespread economic slowdown, which may dent growth in demand for fuel, has weighed on energy prices, but some analysts believe that as supply tightens the market may be pretty balanced going forward.
International Brent crude oil futures were up 32 cents, or 0.52 percent, at $61.82 a barrel by 1430 GMT. US West Texas Intermediate (WTI) crude futures rose by 21 cents, or 0.4 percent, to $53.22.
Crude prices had fallen 2 percent on Tuesday as financial markets reeled from concerns over the global economy, pushing investors towards safe-haven assets such as government bonds or gold.
But oil prices have been supported by production cuts led by the Organization of the Petroleum Exporting Countries (OPEC) to rein in an emerging supply glut.
Whether OPEC's efforts will be successful depend in part on the development of oil production in the United States.
While the US Energy Information Administration (EIA) said on Tuesday that it expected shale output to rise further, it said that production growth would slow in the coming years.
US crude oil inventories are also expected to have fallen last week, for a third weekly decline, a Reuters poll of analysts shows.
"Oil prices have received support in today’s trading session amid short covering and thin trading volumes," said Abhishek Kumar, senior energy analyst at Interfax Energy in London.
"Market participants are also looking ahead to the weekly petroleum inventories report from the US, which is expected to show a drawdown in the country's commercial crude oil stocks."
The weekly report from the American Petroleum Institute (API), an industry group, is expected later on Wednesday.
Swiss bank UBS sounded a bullish note in its 2019 energy outlook, predicting possible tightness on risks of unrest hitting exports from Venezuela, Libya and sanctions on Iran.
"The OPEC+ production cut deal and healthy oil demand growth should keep the oil market balanced in 2019, with the risk tilted to a deficit due to potential disruptions in fragile OPEC states," the report released on Wednesday said.
A litany of poor economic data worldwide sapped Asian markets, though some optimism emerged as China and Japan said they would use fiscal spending to boost growth.
Chinese finance ministry officials on Wednesday said that the government would step up spending to support its economy, which last year registered its lowest growth rate since 1990.The Bank of Japan said it would keep the ultra-easy monetary settings that have been running since 2013.