NEW YORK -- Oil prices rebounded slightly on Tuesday, supported by strikes at refineries and a cold snap in Western Europe but gains were capped by concerns over falling energy demand worldwide, traders said.
New York's main futures contract, light sweet crude for March, climbed 70 cents from a day earlier to $40.78 per barrel. Prices in New York briefly fell below $40 on Monday.
Brent North Sea crude for delivery in March rose 26 cents to $44.08 a barrel on London's InterContinental Exchange.
Experts were unsure prices could maintain their uptrend amid production cutbacks by the OPEC cartel and faltering demand due to a sharp economic slowdown worldwide.
"The ability of prices to maintain the upper reaches of a range established after a second test of recent lows does show an inherent strength," said Mike Fitzpatrick of MF Global.
"While no one is picking the date that the inevitable recovery begins, there are plenty of projections; most seem to fall between the second quarter of 2009 and third quarter of 2010," he said.
"Revivification efforts are underway around the globe aimed at bolstering demand, even limited success will push up oil prices very quickly," he said.
Prices on Tuesday were buoyed partly by the impact of strikes at refineries in Britain, snowstorms in Western Europe and strike threats in the United States.
Wildcat strikes against foreign workers resumed across Britain on Tuesday while oil industry representatives and union negotiators in the United States extended talks on a new contract.
Snowstorms meanwhile continued to bring travel chaos to Western Europe on Tuesday. Cold weather traditionally boosts oil prices because countries ramp up their demand for heating fuel.
The Organization of Petroleum Exporting Countries pumps 40 percent of the world's oil and late last year cut output by a total 4.2 million barrels per days as prices slumped from record highs of $147 reached in July.
"Oil demand is falling despite the fact that they (OPEC members) keep cutting production," said Phil Flynn of Alaron Trading. "Demand continues to fall as spare production capacity continues to rise."
