Tokyo - Oil prices bounced back in Asia on Tuesday, rebounding from sharp losses driven by a report saying Saudi Arabia was close to completing an oilfield expansion that would ramp up output.
However, analysts the gains would likely be short-lived owing to lingering worries about a global supply glut, while traders nervously await the release of US stockpiles data on Wednesday.
At around 03h30 GMT, US benchmark West Texas Intermediate (WTI) for delivery in June was up 31 cents, or 0.73 percent, at $42.95 and Brent crude for June rose 30 cents, or 0.67 percent, to $44.78.
Both contracts dived on Monday after Bloomberg News said Saudi state oil company Aramco will complete the expansion of its Shaybah oilfield by the end of May, allowing the world's largest exporter to maintain total capacity at 12 million barrels a day.
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Those losses broke a week of gains that came on the back of upbeat data out of China, the world's biggest energy user, and speculation talks to limit production could be restarted.
But Michael McCarthy, chief market strategist at CMC Markets in Sydney, told AFP: “Although we are seeing some positive moves in our trading session today, they have come on very light volumes.”
He noted that attention would be on Wednesday's reading on US commercial crude supplies, which are currently near historic highs.
Also Wednesday the Federal Reserve will wrap up its latest policy meeting. While it is not expected to unveil any new measures, dealers will be hoping for some forward guidance on monetary policy and any future interest rate hikes.
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The world oil market has been hammered over the past two years by weak demand, overproduction, a slowing global economy - particularly China - and a supply glut.
Talks this month aimed at addressing the output problem collapsed in Doha as major producers Saudi Arabia refused to take part without key rival Iran.
Iran said it is unwilling to make cuts until its output as it returns to the market after years of Western-imposed nuclear-linked sanctions.
AFP