Oil prices rose more than 2% today but remained near 6-1/2-year lows as concerns over the global oil oversupply and worries over a slowdown in the Chinese economy continued to weigh. The People's Bank of China (PBoC) announced on Tuesday that it lowered the one-year benchmark bank lending rate by 25 basis points to 4.6%. The central bank hopes with this decision to support the country's economy and to calm down the markets.

The interest rate cut would be effective from Wednesday.

One-year benchmark deposit rates were cut by 25 basis point, reserve requirements (RRR) were lowered by 50 basis points to 18% for most big banks.

New reserve requirements would be effective on September 6.

Comments by Iran's oil minister Bijan Zanganeh. He said that Iran plans to raise output by 500,000 barrels a day as soon as restrictions are lifted, and a further barrels a day in the coming months after the lift-off.

Zanganeh also said that the country wants to sell its oil whether the price declines or rises.

"We should sell our oil whether the price falls or goes to $100 (a barrel). Even though we would like to sell our oil more expensively, the price is determined by the market," he noted

Market participants are awaiting the release of U.S. crude oil inventories data. The American Petroleum Institute (API) is scheduled to release its U.S. oil inventories data later in the day, and U.S. oil inventories data from the U.S. Energy Information Administration is expected on Wednesday.

WTI crude oil for October delivery rose to $39.52 a barrel on the New York Mercantile Exchange.

Brent crude oil for October increased to $43.35 a barrel on ICE Futures Europe.