Oil stages modest rebound

Oil rebounded on bargain-buying today after the previous day's plunge but analysts warned any gains would be limited as the global glut showed no sign of letting up.
Investors were 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.
In midday deals in London, Brent North Sea crude for delivery in April added 54 cents to USD 30.86 a barrel.
US benchmark West Texas Intermediate (WTI) for March delivery gained 45 cents to USD 28.39 a barrel compared with yesterday's close.
WTI plunged 5.9 per cent and Brent dived 7.7 per cent yesterday 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 today'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 was unlikely to be sustained, with the US Department of Energy expected to report 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 peaks above $100 per barrel in mid-2014 to under USD 30, hit by a perfect storm of overproduction, oversupply, weak demand and a slowdown in the global economy, particularly key consumer China.
"With the market already awash in oil, it is very hard to see how oil prices can rise significantly in the short term," the Paris-based IEA had said yesterday.
"In these conditions the short term risk to the downside (for prices) has increased," added the watchdog that advises countries on energy policy.

He said competitive gas pricing is crucial in making the
projects attractive for prospective investors. He also expressed India's interest in setting up an LNG plant and a gas cracker in the Chabahar port.
New Delhi is looking to increase engagement with the sanction-free Iran by raising oil imports and possible shipments of natural gas. It also wants rights to develop Farzad-B gas field in the Persian Gulf discovered by OVL.
Sources, however, said a deal for field was not signed during Pradhan's visit as Iranian Parliament, Majlis, is yet to approve new Iran Petroleum Contract (IPC) under which the Farzad-B field is to be given to the OVL-led consortium.

IPC ends two-decade old buyback system that prevented foreign companies from booking reserves or taking equity stakes in Iranian companies. Under some circumstances, the new model allows reserves to be booked, but foreign companies would still not own oil fields.
While previously foreign firms were paid a fixed fee for discovering and bringing to production an oil and gas field, the new model raises their profit by grading the fee based on the risk of the fields, allows contracts to last for up to 25 years and no ceiling on capital expenditure.
Foreign firms are to be paid a fee per barrel and they will also be entitled to an increase in profits in the face of dramatic oil price fluctuations.

Indian firms have so far shied away from investing in Iran for the fear of being sanctioned by the US and Europe. The same was deterring New Delhi from claiming rights to invest nearly USD 7 billion in the biggest gas discovery ever made by an Indian firm abroad.
But after the lifting of sanctions, India is making a renewed pitch for rights to develop 12.8 trillion cubic feet of gas reserves OVL had found in 2008.
Pradhan also conveyed to the Iranian side that both countries must expand the basket of oil and gas trade.
He expressed India's interest in importing LPG from Iran and said companies from both sides could discuss on setting up an extraction plant in Chabahar, if required. Both sides agreed to continue examining various means of evacuation of gas such as LNG, including through the proposed Iran-Pakistan-India pipeline.

Pradhan visited Chabahar Free Trade Zone and Port for a site visit and discussed the facilities and incentives which could be offered to Indian companies.
The visit came 9 years after the previous visit by an Indian minister of Petroleum & Natural Gas. It was the first visit of an Indian minister to Iran after sanctions were lifted this January.