Oil hovered below $58 a barrel today after yesterday's $2 slide amid signs that Opec will keep output stable when it meets in March.
US crude stood 8 cents up at $57.89 a barrel earlier this morning after falling $2.08 or nearly 3.5 per cent yesterday. London Brent crude rose 21 cents to $56.81 a barrel.
Several Opec ministers have said there will be no need for more output cuts to add to pledged reductions of 1.7 million barrels per day, with Saudi Arabia's oil minister Ali al-Naimi saying the market was in better balance.
Heating oil futures led losses yesterday as a lack of further supply reductions would come at a time of fading US winter demand, despite a recent cold snap that has cut inventories.
Trade sources have said Saudi Arabia, the world's top crude exporter, will keep supplies steady to global oil majors in March, though Japanese refiners confirmed today that the kingdom will lift March supplies to Asia.
While analysts say non-Opec supply is not increasing as quickly as expected, a British oil industry survey reported that oil and gas supplies from Britain will rise this year for the first time since 1999.
Combined oil and gas output should rise by 200,000 barrels of oil equivalent per day to 3.15 million boepd.
Anxiety over Iran's nuclear programme is still a supportive factor for oil prices, traders said.
EU leaders agreed to implement UN sanctions to keep pressure on Tehran, although yesterday they said Iran was showing "new ambition" to negotiate an end to to a nuclear row with the West and the door was open for new talks.