Oil rebounds more than 1% in early trade Wed

SINGAPORE: Oil rebounded more than 1 percent on Wednesday, with Brent rising above $71 a barrel, recouping some of its losses from the previous session as a turbulent market struggled to find a price floor.

The market has swung through sharp gains and losses since OPEC announced last week that it would maintain steady output in an oversupplied market. Brent and U.S. crude are down more than 30 percent since June and touched five-year lows on Monday.

Brent crude hit a high of $71.46 a barrel on Wednesday after falling $2 in the previous session. The January contract was up 75 cents at $71.29 by 0210 GMT (09:10 p.m. ET).

U.S. crude for January was at $67.85 a barrel, up 97 cents, after dropping more than $2 the session before. The contract touched a high of $67.97 after data from the American Petroleum Institute showed a bigger than expected fall in crude inventories.

"The market's volatility is a result of people working out what's going to happen next," said Jonathan Barratt, chief investment officer at Ayers Alliance Securities.

He said a low price "will force weak people out of the market and the strong will prevail".

Saudi Arabia and other key members have kept output stable in November, underlining their focus on defending market share, a Reuters survey found. OPEC's oil supply in November declined by 340,000 barrels per day (bpd) due to political instability in Libya.

Yet, Iraq could export more crude after Baghdad reached a temporary deal with Kurdish regional authorities.

Saudi Arabia would only consider cutting production if other countries, including non-OPEC producer Russia, joined in limits, former Saudi intelligence chief Prince Turki bin Faisal said.

"Prices should find a volatile low at these levels" given that Russia, hurt by a drop in oil revenues, may act to prop up prices, Barratt said.

Other factors that could support oil include whether OPEC will stay united on its policy and when non-OPEC producers will start to cut back output, he said.

Still, chart analysts have warned that the months-long rout is not over yet and U.S. crude may quickly plunge toward $50 per barrel if a handful of tenuous support levels give way after a period of consolidation.

In the United States, crude inventories fell by 6.5 million barrels in the week to Nov. 28 to 373 million, according to API, compared with analyst expectations for an increase of 1.3 million barrels.

Data from the U.S. Energy Information Administration is due on Wednesday at 10:30 a.m. EST.- Reuters