World oil prices rebounded on Wednesday as traders snapped up bargain crude following recent heavy losses, analysts said.
Brent North Sea crude for October jumped $1.09 to $101.43 per barrel in early afternoon London deals, having tumbled the previous day to a 16-month low.
US benchmark West Texas Intermediate (WTI) for October delivery added $1.03 to $93.91 a barrel.
"Prices rebounded and climbed towards $94 per barrel, as the oil market seems to have overreacted yesterday," said Sucden analyst Myrto Sokou.New York oil prices had plunged by more than $3 on Tuesday following weak manufacturing data from China and Europe and amid generous supplies around the world.
The market was also pushed lower on Tuesday by the strong greenback, which makes dollar-priced oil more expensive for buyers using weaker currencies, denting demand and weighing on prices.
WTI crude fell $3.08 to $92.88, its lowest closing level since mid-January. Brent oil meanwhile sank to $100.17, its lowest intra-day level since June 2013.
Dorian Lucas, analyst at British-based energy consultancy Inenco, added that Wednesday's rebound in prices was not unexpected.“The rebound in Brent crude is not to be unexpected after such a prominent bearish day's trading yesterday," Lucas said.
"Despite the rebound, the market remains fundamentally bearish as supply is abundant, with clear indications of faltering demand from significant global consumers.”
Investors will next be scrutinising the latest official US petroleum stockpiles report for trading cues.
The US government's Energy Information Administration will release the report a day later than usual on Thursday instead of Wednesday, due to a public holiday on Monday.
"The Labor Day holiday marked the end of the US driving season, and investors will be looking at the latest stockpiles report to give a wrap-up on what the season looked like this year," said David Lennox, resource analyst at Fat Prophets in Sydney.
US gasoline demand typically spikes during the summer months when Americans traditionally hit the road for their holidays.