Crude futures on Tuesday bounced back from two-month lows, helped by a weaker dollar, but an oil inventory glut and a drop in bullish bets by investors weighed on prices.
Brent crude was up $1.29 at $47.54 per barrel at 1218 GMT. U.S. West Texas Intermediate crude was up $1.10 at $45.86 a barrel.
OPEC cut its forecast for world economic growth this year citing increased uncertainty following Britain's vote to leave the European Union and in its first 2017 forecast said the pace of oil demand growth would slip.
The Organization of the Petroleum Exporting Countries lowered its 2016 global economic growth forecast to 3.0 percent from 3.1 percent.
"Today's rally, due in large part to the equity market, isn't really supported by the fundamentals," head of commodity strategy at ING Hamza Khan said.
Saudi Energy Minister Khalid al-Falih said on Tuesday the oil industry needed a price above $50 per barrel to sustain investment but added that downward pressure would prevail because of an inventory glut.
"We need a price higher than $50 to achieve balance in oil markets in the long term," Falih told German business daily Handelsblatt.
"But there are still excess stocks on the market - hundreds of millions of barrels of surplus oil. It will take a long time to reduce this inventory overhang," he said.
OPEC was upbeat about 2017 being the year when excess oil
inventories will fall.
"Market conditions will help remove overall excess oil stocks in 2017."
Oil prices fell to a two-month low on Monday on renewed fears of oversupply.
On Tuesday, commodity and stock prices rose as the dollar index dropped 0.4 percent. The British pound bounced back from a 31-year low amid easing political tensions in Britain and as hopes for stimulus measures boosted risk appetite.
On the downside, a Reuters poll showed that China's economic growth likely cooled to a seven-year low in the second quarter as the industrial sector lost steam and a boost from financial services faded.
China's top oil firm, CNPC, said it saw the country's oil consumption rising to 670 million tonnes by 2027 from 520 million in 2014, implying annual growth of just 2 percent.
"Oil prices could
rally each time macro sentiment recovers on expectations of yet another round of quantitative easing, but for now the path of least resistance seems to be lower in the near term," analyst Virendra Chauhan of Energy Aspects told the Reuters Global Oil Forum
Energy Aspects cut its third-quarter Brent forecast to $52 from $55 a barrel.
(By Dmitry Zhdannikov, Additional reporting by Ahmad Ghaddar in London, Henning Gloystein in Singapore and Christopher Johnson in London)