Oil rebounds on bargain hunting

London - World oil prices rebounded on Thursday as dealers snapped up bargain crude, one day after the commodity sank to fresh two-month lows on disappointing US inventories.

At about 14:00, US benchmark West Texas Intermediate for delivery in August was up 83 cents at $45.58 a barrel compared with Wednesday's close.

Brent North Sea crude for September delivery added 94c to $47.20 a barrel.

Crude futures were also buoyed by the weaker dollar, which makes dollar-denominated oil cheaper for buyers using stronger currencies. In turn, that tends to stimulate demand and price levels.

The market had tumbled on Wednesday after official US data showed a smaller-than-expected decline in crude stockpiles. That compounded fears that a supply glut might not be easing as quickly as expected.

US commercial crude inventories fell 2.5 million barrels in the week ended July 8. However, they still held at historically high levels while production, which had been steadily falling, increased.

Over the past month, oil has fluctuated between $44 and $52 per barrel, after hitting near 13-year lows below $30 in February on the back of a global supply glut.