West Texas Intermediate futures for September delivery rebounded to $48.73 (+0.58%), while Brent crude climbed to $55.48 (+0.38%). However analysts say these gains are unlikely to be sustained as glut concerns persist. Weakness of preliminary data on Chinese manufacturing also weighs on oil as it intensifies concerns over demand. This is going to be the fifth straight week of declines for WTI.

Concerns over additional supplies from Iran are also in place. Iran has large oil reserves on land as well as at sea, and Saudi Arabia, OPEC's leading producer, is not going to cut output or exports to help Tehran sell its crude. Therefore, whenever Iranian oil exports begin to grow, they should put further downward pressure on oil prices.