(MENAFN- ProactiveInvestors)Oil prices bounced back modestly on Tuesday as stock markets lifted and China's central bank cut the country's cost of borrowing. The prices per barrel of Brent crude and US West Texas Intermediate both rose more than 2% amid a equity market rally after Monday's rout. BP (LON:BP.) rose 3.25p to 334.3p Royal Dutch Shell (LON:RDSB) gained 25p to 1611p and BG Group (LON:BG.) inflated 22.8p to 953.8p. News that the People's Bank of China had cut its benchmark interest rate by 0.25% alongside a 0.5% slash to the reserve requirement ratio provided a boost. Better-than-expected flash services US PMI data and a 7-month high in consumer confidence triggering hopes of higher demand may also have helped. The rebound came after oil prices hit six-year lows on Monday following Iran's pledge to open the taps in the wake of a Western plan to lift sanctions. Chief market analyst at CMC Markets Michael Hewson said: "While today's rebound is welcome it doesn't in any way mean that we've hit the base we'll need to see further evidence of that in the coming days." News of the Chinese rate cut and positive US economic data helped traders to shrug off warnings that oil cartel OPEC may keep production at current levels. Capital Economics analysts said in a note: "We think OPEC will remain steadfast in its policy of maintaining high output despite the renewed slump in oil prices and the potential return of exports from Iran. "The core Gulf members of the cartel are in a strong enough financial position to weather an extended period of lower oil prices. "What's more lower prices now should boost global economic growth and demand as well as curtailing alternative sources of production not least US shale which should lead to higher prices in the future."
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