By Polya Lesova, MarketWatch NEW YORK (MarketWatch) -- Oil futures rose early Wednesday, buoyed by China's decision to cut interest rates and the European Union's proposal of a $260 billion stimulus plan. Traders are also awaiting the latest data on U.S. petroleum inventories due later in the session. Crude oil for January delivery gained 98 cents to $51.76 a barrel in electronic trading on Globex. In the previous session, crude tumbled nearly 7%. The People's Bank of China Wednesday slashed its lending and borrowing rates by more than 1%, in addition to cutting banks' reserve requirements sharply, to deliver its strongest response yet to a recent slowdown in the mainland's economic growth. Read more. "The Chinese interest rate cut is a positive move as this could help speed up the Chinese economy's recovery from the current slowdown, and therefore encouraging for oil demand growth in the future," said Nimit Khamar, an analyst at Sucden Research, in a note. "However, some may view the magnitude of the cut as a sign of just how much things have deteriorated in China," Khamar said. Meanwhile, the European Union proposed a 200 billion euro ($260 billion) plan Wednesday, equal to around 1.5% of gross domestic product, as it joins in efforts by governments to fight a potentially steep, global downturn. See full story. Supply data ahead The Energy Information Administration (EIA) will release data on U.S. petroleum inventories for the week ended Nov. 21. Analysts surveyed by Platts expect crude inventories to have increased by 400,000 barrels last week. They also expect a buildup in gasoline stocks of 300,000 barrels for the week as well as a drawdown of 900,000 barrels in distillate stocks. The EIA's also scheduled to release weekly data on natural-gas inventories on Wednesday, a day early because of the Thanksgiving holiday. Analysts surveyed by Platts expect gas in storage to have dropped by between 43 and 48 billion cubic feet last week. Energy traders also have on their radar screens the upcoming meetings of the Organization of Petroleum Exporting Countries. The oil cartel's scheduled to meet Saturday in Egypt followed by a gathering Dec. 17 in Algeria. "We suspect that should oil prices fail to rally by week's end, cartel officials meeting in Cairo will be given a green light to announce a production cut in advance of the more formal gathering on Dec. 17 in Algeria," said Edward Meir, an analyst at MF Global, in a research note. "With energy prices as weak as they are and threatening to break below the key $50 mark, we doubt OPEC has the luxury of waiting for another three weeks before it announces what seems to be a foregone conclusion," Meir said. Also on Globex Wednesday, January reformulated gasoline gained 1 cent to $1.13 a gallon and January heating oil rose 3 cents to $1.73 a gallon. January natural gas futures fell 2 cents to $6.37 per million British thermal units.

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