World oil prices rebounded towards $130 a barrel this evening, reversing earlier losses in volatile trading. Analysts said worries about supply were still affecting the market.
US crude gained 64 cents to $129.49, having earlier slid as low as $125.96. Brent North Sea crude rallied 66 cents to $128.97. It had earlier touched a low of $126.04.
Both contracts had hit historic peaks above $135 last Thursday as speculative trade was driven by tight global supplies and a weak dollar, which makes commodities priced in the US unit cheaper for foreign buyers.
But prices tumbled on Tuesday because of profit-taking and growing fears about demand in the US - the world's biggest consumer of energy.
The price of oil on international markets has surged by about a third since the start of 2008. It has been supported by unrest in crude-producing countries - particularly Nigeria - and OPEC's reluctance to hike output.
