Oil prices rebounded sharply on Tuesday, staging a recovery after heavy losses in the previous session, as Saudi Arabia underlined its determination to reduce crude supplies in line with production cuts already agreed by the Organisation of the Petroleum Exporting Countries.

A senior Saudi official said customers had been advised about a supply cut of 158,000 barrels a day from February 1. Saudi production will be about 1m b/d lower than last summer once the cuts are implemented.