Oil prices rose by roughly 2 percent early on Tuesday, recovering from Monday's loss which came after China reported weak trade data, signaling that its economic growth could be slowing down.
At 10:39a.m. EDT on Tuesday, WTI Crude was up 2.34 percent at $51.69, while Brent Crude traded up 1.78 percent at $60.04.
After a good start to the year earlier this month, oil prices dipped 2 percent on Monday, after weak Chinese economic data had investors, traders, and analysts worried again about an economic slowdown that could weigh on fuel and crude oil demand growth.
On Tuesday, China's National Development and Reform Commission dispelled some fears about the economy, at least for the day, signaling that it could introduce more fiscal stimulus into the Chinese economy.
According to Vanda Insights, Tuesday's rise in oil prices was supported by signs that OPEC and allies believe in rebalancing the oil market.
"Crude futures were stronger early Tuesday in Asia, amid comments from the Saudi energy minister at an industry conference in Abu Dhabi expressing confidence in oil demand growth and the ability of the OPEC/non-OPEC cuts to rebalance the market," Vanda Insights says.
Another driver for higher oil prices early on Tuesday came from comments from the U.S. Administration over the weekend that the U.S. has no intention of granting any further sanction waivers to Iran's crude oil buyers.
Major stock markets across Asia opened higher on Tuesday, which also contributed to the positive sentiment on crude oil, according to Vanda Insights.
Analysts, however, warn that the oil price recovery could be short-lived and could falter amid renewed worries about the pace of global economic and oil demand growth.
"Any price rally is unlikely to be sustainable in the first half of the year simply because the demand for OPEC's oil is expected to be lower than the projected output from the organization," PVM Oil Associates strategist Tamas Varga told Reuters.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More