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 The Organization of the Petroleum Exporting Countries is making
renewed calls for rival producers to cut supply alongside its
members, but Russia, seen as key to any deal, has so far refused to
cooperate.
Iraqi Oil Minister Adel Abdel Mahdi said on Tuesday he saw "some
flexibility" for a deal.
Such an idea has been repeatedly mooted and dismissed for over a
year.
Brent crude was up 37 cents to $30.87 a barrel by 1214 GMT,
rebounding from an earlier decline. It reached $27.10, its lowest
since November 2003, on Jan. 20. U.S. crude was up 34 cents at
$30.68.
"Without a production agreement, fundamentals point to lower
numbers," said David Hufton of oil brokers PVM. "With one, oil
becomes a $40-to-$60-a-barrel market."
Demand concerns limited the rally. China's annual rail freight
volume fell 11.9 percent in 2015 versus a drop of 3.9 percent in
2014, adding to worries about contracting economic activity in the
second-largest oil consumer.
"Fears of a sharp slowdown in economic growth, particularly in
China, are dragging down global stock markets from arguably
overheated levels," analysts at Energy Aspects said in a report.
"This is weighing on other risky assets, including oil."
Despite a price collapse and spending cutbacks across much of the
industry, major OPEC producers are sticking to investment plans and
some intend to boost supply.
The risk of prices staying low for a longer time is not deterring
Kuwait from investing in energy projects, the head of Kuwait
Petroleum Corp said on Tuesday, echoing similar comments from the
chairman of Saudi Arabia's state oil company.
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Iraq may further boost output this year, a senior Iraqi oil
official, who asked not to be identified, said on Monday. Production
hit a record in December.
Investors are now watching the U.S. Federal Reserve policy meeting
starting later in the day, the first since the central bank raised
interest rates in December, for clues on the movement of the dollar.
Underlining the glut, analysts expect the latest weekly reports on
U.S. supplies to show crude inventories, already close to a record
high, rose further. [EIA/S]
The American Petroleum Institute, an industry group, releases its
supply report at 2130 GMT and the government's data is due on
Wednesday.
(Additonal reporting by Meeyoung Cho in Seoul; editing by Dale
Hudson and Jason Neely)
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