Oil prices rose from 12-year lows Thursday in action seen as a technical bounce after they collapsed below $30 a barrel this week amid ongoing global oversupply.

US benchmark West Texas Intermediate (WTI) for February rose 72 cents to $31.20 a barrel on the New York Mercantile Exchange.

Brent North Sea crude for delivery in February also gained 72 cents, finishing at $31.03 a barrel in London.

“What we’ve seen, if anything, is a bit of a technical bounce,” said Bart Melek, head of commodity strategy at TD Securities.

“Probably for now the market has oversold a little bit. So I wouldn’t say that something fundamental is happening today,” he said.

Two weeks into 2016, oil prices have has shed more than 15 percent as investors worry about the prolonged global crude-oil oversupply and the uncertain demand outlook, particularly in China.

The WTI fell below $30 a barrel on Tuesday and it was Brent’s turn on Wednesday, bringing the benchmark contracts to the lowest levels in about 12 years.

“We’re starting to see some bottom here in the US, maybe we’re seeing a bottom at $30 dollars, not much less,” said Carl Larry at Frost & Sullivan. “There’s some consolidation going on.”

Nevertheless, most analysts expect gains will be short-lived.

“The wider market remains under moderate selling pressure... an ongoing physical supply/demand surplus still adding to global inventories,” Tim Evans of Citi Futures said in a note to clients.

“Iran also continues to make progress toward ‘implementation day’ on its nuclear agreement with international powers, with sanctions likely to be lifted within days and additional oil to flow soon thereafter,” Evans added.

Iran said Thursday it had removed the core of its Arak heavy water reactor and filled part of it with cement, a crucial step under a soon-to-be implemented nuclear agreement with six world powers.

The implementation of the deal, allowing the removal of sanctions, is expected by Sunday. (AFP)