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[SINGAPORE] 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 are 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 0300 GMT, US benchmark West Texas Intermediate (WTI) for March delivery was up 54 cents, or 1.93 per cent, at US$28.48 and Brent crude for April climbed 72 cents, or 2.37 per cent, to $31.04.
WTI plunged 5.9 per cent and Brent dived 7.7 per cent 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 Organisation 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 is unlikely to hold due to expectations that the US Department of Energy would 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 above US$100 per barrel in July 2014 to under US$30 as it is hit by a perfect storm of overproduction, oversupply, weak demand and a slowdown in the global economy, particularly key consumer China.