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Oil prices claw back some ground, but oversupply worries drag

Oil prices clawed back some ground on Wednesday as global equity markets showed signs of stabilizing, but crude was still under pressure from worries about oversupply and a slowing global economy that had driven sharp losses in the last three sessions.

West Texas Intermediate futures (WTI) had climbed 7 cents, or 0.15 percent, to $46.31 per barrel by 07:22 GMT, after plunging 7.3 percent the day before in a session when it touched its lowest since August 2017.

Global benchmark Brent crude futures rose 0.36 percent, or 20 cents, to $56.46 per barrel. They dropped 5.6 percent on Tuesday, at one point hitting a 14-month low.

Brent is down more than 30 percent from a recent peak of $86.74 per barrel on Oct. 3, while WTI has declined nearly 40 percent from a multi-year high of $76.9 per barrel recorded on Oct. 4.

“(WTI prices are holding on Wednesday as) traders look for some solace in U.S. equity markets as risk sentiment appears to be stabilizing,” said Stephen Innes, head of trading for Asia-Pacific at OANDA

“But we are far removed from any bullish flip in investor sentiment.”

Oil market investors were also turning their attention to the outcome of a two-day meeting of the U.S. Federal Reserve that is due to end on Wednesday.

The Fed is expected to raise U.S. interest rates for the fourth time this year though the central bank may temper the outlook for further increases in 2019 due to concerns about the economy.

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