Oil claws back some losses but remains at 2009 levels over Asian economic woes

China's major stock indexes slumped more than 6 percent to 8-month lows in early trade on Tuesday before paring losses, after a catastrophic Monday that destabilized financial markets around the world and sparked fears of a hard landing for the Chinese economy, the world's biggest commodity consumer.

"The recent turmoil has left even the most hardened trader gasping for air. And there's probably more to come," said Frederic Neumann, HSBC's co-head of Asian Economics Research, in a note to clients.

"China's economy continues to slow and the (U.S.) Fed may still hike rates before the end of the year. That puts further cracks into the two main growth pillars for the world economy of recent years: Chinese demand (including commodities) and easy money," he said, but added that a re-run of Asia's financial crisis in the late 1990s was unlikely.

Crude oil markets reacted cautiously, recovering somewhat but remaining at levels comparable to the peak of the global financial crisis in 2009, suggesting that worries over the economic outlook in China are now at least equally as big as previous concerns of oversupply that has plagued the market for over a year.

U.S. crude futures were trading up 55 cents at $38.79 per barrel at 0245 GMT (10.45 p.m. ET Monday), while Brent was up 61 cents at $43.30.

Goldman Sachs said that while China's turmoil would not lead to a global recession, it did expect the trouble to result in weak commodities.

Goldman said that "we see a meaningful risk that markets are over-interpreting the collapse of oil and commodity prices as a negative growth signal," yet the bank added that due to improved marginal costs, which it estimates to have improved by 20 percent for U.S. shale drillers, "commodities will underperform" relative to other assets.

Beyond Asia's market turmoil, global oil markets have been suffering from oversupply that started pulling down prices in June 2014.

Output from the Organization of the Petroleum Exporting Countries (OPEC) has hit records in a bid to squeeze out competition like Russia, where production is also near records, but especially from U.S. shale producers which, however, have so far been resilient to the resulting price plunges and kept pumping oil.