Crude oil futures declined on Wednesday, heading back towards $30 a barrel as profit-taking wiped out a chunk of the gains notched up in the previous session on hopes for output cuts.
Prices were also dampened by a bigger-than-expected build in US crude inventory and worries about the economy in China, the world's second-largest oil consumer.
Brent crude had declined 60 cents to $31.20 a barrel by 0723 GMT, after hitting a session low of $31.05 a barrel. It settled up $1.30 at $31.80 on Tuesday.
US crude fell 75 cents to $30.70 a barrel, recovering slightly from a session low of $30.30 a barrel. It ended Tuesday $1.11 higher at $31.45 a barrel.
"The positive sentiment stemmed from strong US corporate earnings and talk of OPEC and Russia considering production cuts. We consider the likelihood of any agreement between these parties as extremely low," ANZ stated in a note on Wednesday.
"However, rising US crude stockpiles are likely to remain a headwind in the near term. At the current pace, the US crude stockpiles will cross an all-time high of April last year in the next month."
Daniel Ang at Phillip Futures said: "With the US ability to produce oil in much higher quantities, it will be difficult to support prices with supply cuts. Therefore, it is probably the case that even if major producers want higher prices, they may not be able to achieve this without everyone's blessing."
"Inventory figures, if continuing to grow, would remind the market of the current oversupply. This would possibly be a bad sign for oil prices."
US crude stocks rose by 11.4 million barrels last week ending on Jan. 22 to 496.6 million, as compared with analyst expectations for an increase of 3.3 million barrels.
The fall in oil prices, however, was limited as Venezuela's oil minister plans to tour OPEC and non-OPEC countries in a bid to drum up support for joint action and stem the tumble in crude prices, President Nicolas Maduro announced on Tuesday night.
Also three major U.S. shale oil companies have slashed their 2016 capital spending plans more than expected in a bid to survive the $30-a-barrel oil price, with one of them saying prices would need to rise more than 20 per cent just to turn a profit.
After 2015, which famed oil bull Andrew Hall called "wasn't much fun" because of plunging crude prices, the chief of Astenbeck Commodities says the market is ripe for a jump as producers operate near maximum capacity while supply risks rise.
Asian stocks held near the day's lows on Wednesday as a relapse in oil prices and fresh drops in Chinese stocks made sentiment even more fragile before a U.S. Federal Reserve policy statement due later.