Crude oil futures rebounded on Wednesday on investor hopes that a deal between Saudi Arabia and Russia to freeze oil output at January levels would lead to a wider pact among producers that could eventually see production cuts to support prices.

Brent crude LCOc1 had climbed 45 cents to $32.63 a barrel by 0258 GMT, after settling down $1.21 in the previous session. It had surged to $35.55 a barrel in early trade on Tuesday.

US crude CLc1 was up 29 cents at $29.33 a barrel, having ended the last session down 40 cents.

Top oil producers Russia and Saudi Arabia on Tuesday agreed to limit oil production at January levels, provided other oil exporters joined in, but stopped short of agreeing cuts in oil output.

Iraq, Qatar and Venezuela said they would freeze output at January levels provided a deal could be agreed, while OPEC member Iran could be offered special terms to freeze oil production levels, sources said.

Oil prices initially surged on Tuesday on news of the deal but early gains were wiped out by the realization that there would be no immediate supply cuts to tackle global oversupply.

"It was a 'buy the rumor, sell the fact' event," said Ben Le Brun, market analyst at Sydney's OptionsXpress.

"The market is coming around to the idea that it is not bad news, but not as good news as it was anticipating," he said, adding that investors were hoping for production cuts.

Moves to freeze output at January levels will make little difference to the overall supply-demand balance this year and won't be enough to clear the 600,000 barrels per day surplus projected for the year, analysts FGE said in a note on Wednesday.

"It could pave the wave for further action to be taken should the likes of Saudi Arabia, other OPEC members and Russia deem it necessary," FGE said.

April crude futures will remain range-bound, Singapore's Phillip Futures said in a note on Wednesday.

Saudi Arabia’s oil production has stagnated at slightly more than 10 million bpd throughout 2015, meaning that "all that was achieved was an agreement to continue what they were doing", Phillip Futures said.

Investors are also eyeing US oil inventory data later on Wednesday for further direction on oil prices.

US crude stocks rose by 3.9 million barrels to 505.9 million barrels in the week to Feb. 12, according to a Reuters poll of analysts on Tuesday.

Weekly inventory reports from industry group the American Petroleum Institute (API) and the US Department of Energy's Energy Information Administration (EIA) will be released on Wednesday and Thursday respectively, a day later than usual because of a public holiday on Monday. – Reuters