Brent Recoups Some Losses, But Could Be In For Another Slide

Brent crude oil was able to reverse some of the losses suffered from worries about emerging market turmoil and a slowdown in China on Tuesday; and steadied to $107.48 at 4:55 GMT on Wednesday morning. Strong economic data from the US helped alleviate some worries about a global slowdown and confirmed that the number one oil consuming nation was getting back on track.

reported that American consumer confidence was at its highest level in three months in January. The figure came in at 80.7, a large jump from December's 77.5. House price data also painted a rosy picture of the US, with the figures showing that housing prices had risen 13.7 percent in November.

Calmer markets helped commodities recover after days of sell offs sparked by weak Chinese data. However, the world's second largest economy is expected to continue disappointing as analysts see China's factory activity falling to a six month low in January. If the forecasts are correct, worries that China's sluggish economy continued to struggle into 2014 will be confirmed. Moving forward, investors will be focused on the US Federal Reserve policy meeting on Wednesday. The US central bank is expected to announce that it will continue to taper its stimulus spending, which has been keeping commodity prices supported. Most expect that the US' central bankers will elect to cut down on the bank's monthly asset buying by $10 billion in February. Another round of tapering will strengthen the dollar, which in turn would make commodities priced in the greenback vulnerable.