NEW YORK (TheStreet) -- Shares of Cobalt International Energy (CIE)  are up 1.38% to $8.09 in mid-afternoon trading on Tuesday, as oil prices gain amid China's interest rate cut.

After a global market selloff led by a sharp drop in Chinese stocks on Monday, China's central bank today decreased interest rates and banks' required reserves in an attempt to boost its sluggish economy. 

Oil prices reacted with slight gains after falling below $38 per barrel yesterday, and crude oil (WTI) this afternoon is climbing by 2.82% to $39.32 per barrel, while Brent crude is up by 1.24% to $43.22 per barrel, according to the CNBC.com index.

However, a global oversupply still plagues the oil market, contributing to concerns over the economic slowdown in the world's second-largest oil consumer, The Wall Street Journal reports.

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"Anything the (Chinese) government does that is viewed as credible will help the market," Amrita Sen, a market analyst at Energy Aspects, told The Journal. "[However], the broader theme is still that demand is very robust and it's the supply side that's been the problem...Prices need to be lower for longer to make sure the supply side start reacting."

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