After a steep fall, oil prices showed signs of stability on Tuesday, with prices remained almost flat in early trading.
Analysts said the market awaits further price direction from OPEC’s monthly report before charting the next course.
Brent crude futures fell 1 cent to $71.82 a barrel, while US West Texas Intermediate crude futures were at $68.07 a barrel, up 3 cents.
China’s stimulus plan and oversupply concerns took the wind out of crude oil markets in prior sessions.
Both contracts had fallen by more than 5 per cent over the previous two trading sessions.
China on Friday unveiled a 10 trillion yuan ($1.40 trillion) debt package to ease local government financing strains, but analysts said it fell short of the amount of stimulus that would be needed to boost growth, Reuters reported.
Further price direction will come from the Organisation of Petroleum Exporting Countries (OPEC) monthly report due to be released later on Tuesday.
The market will be looking out for further downward revisions in demand from the group’s outlook through 2025, which would add to downward pressure on prices.
“Prompt time spreads for Brent and WTI have collapsed recently, moving closer to contango, suggesting a better-supplied physical market,” ING analysts said in a note.
When a futures market is in contango, contracts for prompt delivery are less than for future delivery, suggesting the market is well supplied in the near term or that demand for oil is greater in the future.
Meanwhile, the US dollar closed higher on Monday as markets braced for further signals from US inflation data and Federal Reserve speakers this week.
That makes commodities denominated in the US currency, such as oil, more expensive for holders of other currencies and tends to weigh on prices.
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