Tehran and Riyadh agree to negotiate over oil prices

Iran said it was open to cooperation with Saudi Arabia over the current conditions in international oil markets, as crude oil prices began to push higher on Wednesday.

"We support any form of dialogue and cooperation with OPEC member states, including Saudi Arabia," Iran's Oil Minister Bijan Zangeneh told reporters.

Tehran recently resumed oil exports after Western sanctions over its nuclear programme were lifted.

It announced plans to produce 500,000 barrels a day, a move which will add significant pressure on an already oversupplied market, as OPEC continues to refuse to cut its production.

"If there were a strong political will, the price of oil would have been balanced within one single week," Islamic Republic News Agency (IRNA) quoted Zangeneh as saying.

"None of the oil producers are happy with the existing prices, which will harm suppliers in the long term."

Zangeneh added that Iran needed as much as $200 billion in investments to revamp its oil industry.

However, traders and delegates from the Organization of the Petroleum Exporting Countries [OPEC] are sceptical about any deal between the group and rival producers - which would be the first in over a decade.

OPEC was chiefly responsible for the oversupply, adding that Saudi Arabia, Iraq and Iran had "all opened up the taps" in January.

Chinese investors and traders are coming back to support the market after the Lunar New Year holidays

Oil prices rebounded on Wednesday after the previous day's plunge but analysts warned any gains would be limited as the global glut that has hammered markets 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.

Phillip Futures analyst Daniel Ang also said Wednesday'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 later on Wednesday with 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 $30, hit by a perfect storm of overproduction, oversupply, weak demand and a slowdown in the global economy, particularly key consumer China.