US crude rebounds in Asia but supply glut worries weigh

Oil prices rebounded on bargain-buying in Asia Wednesday after the previous day's plunge but analysts warned any gains would be limited as the global glut that has hammered markets showed no sign of letting up.

Investors were also nervously awaiting the release later in the day of a report on US stockpiles that is forecast to show a further increase in inventories.

At around 0620 GMT, US benchmark West Texas Intermediate (WTI) for March delivery was up 48 cents, or 1.72 percent, at $28.42 and Brent crude for April climbed 50 cents, or 1.65 percent, to $30.82.

WTI plunged 5.9 percent and Brent dived 7.7 percent on Tuesday after the International Energy Agency (IEA) said in its monthly report that the global surplus would be larger than previously expected in the first half of 2016.

It noted that the Organization of the Petroleum Exporting Countries (OPEC) was chiefly responsible for the oversupply, adding that Saudi Arabia, Iraq and Iran -- which has just seen nuclear-linked sanctions lifted -- had "all turned up the taps" in January.

Phillip Futures analyst Daniel Ang also said Wednesday's price rebound was helped by the reopening of some regional markets after the Chinese New Year break.

"Chinese investors and traders are coming back to support the market after the Lunar New Year holidays," he told AFP. "They are buying crude oil on discount."

But Ang said the rebound was unlikely to be sustained, with the US Department of Energy expected to report later Wednesday another rise in commercial crude stocks in the week ending February 5.

"The current issue is still about oversupply. Fundamentals are still the same," he added.

Crude prices have crashed from peaks above $100 per barrel in mid-2014 to under $30, hit by a perfect storm of overproduction, oversupply, weak demand and a slowdown in the global economy, particularly key consumer China.