Oil prices jump, shrug off equity slump and glut concerns

Market traders however seemed to ignore a 4% drop in Japan's Nikkei

Crude oil prices jumped as much as 2% in early Asian trade on Tuesday, shrugging off big drops in Japan's stock market and eroding some of the previous session's losses that were driven by festering concerns about global oversupply.

US crude was up 44 cents at $30.13 a barrel at 0103 GMT, after rising as far as $30.30. The contract fell nearly 4% on Monday, finishing at $29.69.

Global crude benchmark Brent was up 17 cents at $33.05 a barrel. It settled the previous session down $1.18 at $33.88.

Prices on Monday were hit by a drop in US equity markets amid persistent fears about the global economic slowdown.

But on Tuesday, oil market traders seemed to ignore a 4% drop in Japan's Nikkei. Many Asian markets are closed for Lunar New Year holidays, with oil trade volumes thin.

The US dollar fell against the Japanese yen as sentiment towards most risk assets turned bearish amid concerns about banking stability.

A declining dollar makes oil prices cheaper because most trade is denominated in the greenback, potentially spurring demand.

Still, the glut in world oil markets is unlikely to abate soon, with a Reuters survey showing US crude stocks likely rose by 3.9 million barrels in the week ended February 5.

Industry group American Petroleum Institute on Tuesday releases its weekly inventory reports

There is also little sign of any coordination among big producers outside the United States after weekend talks between OPEC members Saudi Arabia and Venezuela on possible coordination yielded little.

That dims prospects of any initiative on curbing supply to boost prices including producers like Russia, analysts say.

"Hopes of a coordinated supply cut from OPEC and non-OPEC members continue to fade," ANZ said in a research note on Tuesday.