West Texas Intermediate futures for September delivery slid to $47.85 (-0.27%), while Brent crude slid to $53.18 (-0.23%). Nevertheless both crudes stepped away from the lowest levels in almost four months as Chinese markets showed some stabilization after Monday selloff.

Today investors are waiting for weekly data on U.S. inventories, which are likely to show an increase and put pressure on oil prices.

"Crude oil is facing a massive production glut with no producers cutting back and inventory building up," said an analyst from Citibank.