Oil prices rebound in Asia on bargain hunting

However, demand remained weighed down by the slowing Chinese economy and a global oversupply

Oil prices rebounded in Asia today on bargain hunting ahead of a report on US crude inventories, but demand remained weighed down by the slowing Chinese economy and a global oversupply.

US benchmark West Texas Intermediate for delivery in November climbed 17 cents to $46.06 and Brent crude for December advanced 13 cents to $48.74 a barrel at around 0300 GMT.

Both contracts fell sharply on Monday following the release of official data showing that China's economy grew at its weakest pace in more than six years, renewing concerns over demand in the world's top energy consumer.

China, the world's second-biggest economy, said its gross domestic product rose at a 6.9% annual pace in the third quarter, marginally above market forecasts but still the weakest growth since the first quarter of 2009.

Beijing also reported that industrial production growth dropped to 5.7% year-on-year in September.

"Today's rebound in oil prices comes from bargain hunting following the huge drop we saw on Monday," said Daniel Ang, an investment analyst with Phillip Futures in Singapore.

He said the sharp decline in prices on Monday was an "overreaction to the Chinese data".

Ang told AFP the fundamentals of crude supply outpacing demand "remains the same" and will continue to hobble prices for the commodity.

Traders are also waiting for the release on Wednesday of a report on US crude stockpiles in the week ending October 16. Analysts are expecting a build-up in the inventories, which would indicate softer demand.

Both the WTI and Brent have failed to hold above $50 a barrel this month as the global market remains oversupplied, with the Organisation of the Petroleum Exporting Countries continuing to pump above their quota.

The market is also bracing for the return of Iranian oil as Tehran and world powers begin to implement a deal aimed at curbing Iran's nuclear programme in exchange for the lifting of crippling economic sanctions.