Oil prices stabilised on Wednesday following news that China’s central bank will back the country’s economy, but prices stayed near six-and-a-half-year lows due to oversupply.

Brent went up 20 cents at $43.41 a barrel and US crude increased 15 cents at $39.46 a barrel, Reuters reported.

China reduced interest rates and lowered the reserves to be held by the banks as part of a move to soothe fears about the weakening economy.

"China reduced interest rates and lowered the reserves to be held by the banks."

Capital Economics commodities economist Thomas Pugh told the Reuters that the oil market was: "Already pricing in a worst case scenario in China at the moment."

Organization of the Petroleum Exporting Countries members are producing high-volumes of oil, with Iran planning to increase crude production to regain its lost export share following lifting of international sanctions.

Industry data from the American Petroleum Institute highlighted a decline in crude inventories in the US by 7.3 million barrels to 449.3 million due to a rise in refinery runs.

The Energy Information Administration is expected to release data on the US Government oil stockpiles later this week.