Brent crude oil prices rebounded on Tuesday from 12-years lows after data showed Chinese oil demand likely hit a record high in 2015, but the recovery was not expected to last amid warnings that the market would stay oversupplied this year.
Analysts also attributed much of the bounce from under $28 a barrel to a brief short-covering rally after oil prices crashed over 20 percent this year, triggering a record volume of short positions in the week through Jan. 12.
“It seems to be a healthy upside correction in an otherwise downtrending market,” said Tamas Varga, oil analyst at London brokerage PVM Oil Associates.
The Brent LCOc1 contract for March delivery rose 69 cents to $29.24 a barrel, up 2.4 percent, by 1:04 p.m. EST (1804 GMT). It traded as high as $30.24, rebounding from $27.67 on Monday, its lowest since 2003.