By Henning Gloystein
SINGAPORE (Reuters) - Oil prices stabilised on Wednesday after steep falls in the previous session, when markets were dragged down by growing concerns about an economic slowdown.
Oil markets have been underpinned this year by production cuts led by the Organization of the Petroleum Exporting Countries (OPEC), aimed at reining in an emerging supply overhang.
International Brent crude oil futures were at $61.58 per barrel at 0131 GMT, up 8 cents, or 0.1 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures were at $53.04 per barrel, up 3 cents.
The steadier tone followed a 2 percent fall in crude oil futures and a slump in global financial markets on Tuesday as concerns over global growth spooked investors into looking for safe-haven assets like government bonds or gold.
Japan on Wednesday reported that its December 2018 exports fell the most in more than two years, dragged down by plummeting shipments to China and wider Asia as weak global demand and U.S.-Sino trade frictions take their toll on the trade-reliant economy.
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Exports in December fell 3.8 percent from a year earlier, Ministry of Finance (MOF) data showed on Wednesday, bigger than a 1.9 percent drop expected by economists in a Reuters poll. It was the sharpest year-on-year decline since October 2016.
A widespread economic downturn is widely expected to also dent fuel demand growth, weighing on energy prices.
Steen Jakobsen, chief economist at Denmark's Saxo Bank, said in a first quarter 2019 outlook that "the global economy is suffering" but added that China's government will do all it can for stability.
A key support would be for the United States and China to find a solution to their bitter trade dispute, Jakobsen said, but to prevent a sharp economic slowdown, a solution needs to show itself before Feb. 5, the Chinese New Year.
Should a deal be reached by then, "we will see powerful support for the Chinese economy", he said, as well as the launch of strong stimulus programmes to keep the economy growing.
Despite this, Jakobsen warned that stimulus programmes could not keep the economy going forever, and there was a large risk of another downturn in 2020.
Providing oil prices with support in 2019 has been production cuts led by OPEC, aimed at reining in an emerging supply overhang.
Whether OPEC's efforts will be successful will also depend on the development of oil production in the United States, where crude output jumped by 2 million barrels per day (bpd) in 2018 to an unprecedented 11.9 million bpd.
The boom was largely fuelled by onshore shale oil drilling. And while the U.S. Energy Information Administration (EIA) said on Tuesday that it expected shale output to rise further, it said that output growth would slow in the coming years.
(Reporting by Henning Gloystein; editing by Richard Pullin)