LONDON:Crude prices recovered Wednesday before a meeting between the Iranian and Iraqi oil ministers following a Saudi Arabia-Russia agreement to freeze output. In early afternoon London deals, Brent North Sea crude for delivery in April jumped $1.02 to $33.20 per barrel. US benchmark West Texas Intermediate for March delivery added 64 cents to $29.68 a barrel from Tuesday's closing level. Oil prices have tumbled about 70 percent since June 2014, hit by oversupply, sluggish demand and concerns over the global economic outlook.–AFP

Prices have come under renewed pressure from Iran's return to world markets after the lifting last month of international sanctions linked to its nuclear programme.

The commodity had enjoyed a surge from Friday to early Tuesday as Moscow and Riyadh -- the world's two biggest producers -- prepared for talks on a rout that has seen the cost of a barrel collapse and hammered global markets.

But the conditional agreement between Saudi Arabia -- the de facto leader of OPEC -- Russia, Venezuela and Qatar to freeze output at record January levels, rather than make cuts, left a bad taste in the mouths of traders, sending both main contracts into reverse.

The meeting in Tehran between historic rivals Iran and Iraq -- as well as Venezuela -- provided some support for the beleaguered commodity Wednesday.

"Sharp price falls were (Tuesday's) market response to the joint decision of Saudi Arabia, Russia, Qatar and Venezuela to freeze their oil production at the January level for the time being," said Commerzbank analyst Carsten Fritsch.

"This is because production will continue to exceed demand significantly for now, meaning that crude oil stocks will continue to grow.

"How prices now perform will depend to a major extent on the signals sent out from Iraq and Iran.

"There are indications that Iraq might be willing to cooperate, in which case Iraq's rapid production growth of almost 1.0 million barrels per day last year would at least come to an end.

"That said, Iran is bound to want to up its output following its long battle for sanctions to be lifted."

Bernard Aw, market strategist at IG in Singapore, also sounded a note of caution.

"Getting a pact, especially from Iran, is going to be very difficult. As such, the upside potential in oil prices is limited," he said.

The weekly US oil inventories report is meanwhile scheduled for publication on Thursday, one day later than normal owing to a public holiday on Monday.