* U.S. crude rises 3 pct after Monday tumble, Brent up 1 pct
* China cuts interest rates, helping global stock market
rebound
* EIA seen citing a 1.0 mln-barrel build in U.S. crude last
week
* Coming Up: API inventory data at 4:30 p.m. EDT (2030 GMT)
(Adds market settlements, analyst comment on rebound and
updated Reuters poll on U.S. crude build)
By Barani Krishnan
NEW YORK, Aug 25 (Reuters) - Oil rose as much as 3 percent
on Tuesday as oversold conditions brought some buyers back to
the market, but a lingering supply glut and worries about the
slowing economy in top commodities consumer China kept crude
prices near 6-1/2-year lows.
Futures of U.S. crude and Brent, the global oil benchmark,
are both down more than 16 percent on the month. About half of
those losses were incurred in the past two sessions as
plummeting Chinese equities sparked a selloff across global
markets.
China cut interest rates on Tuesday and lowered the amount
of reserves banks must hold in its latest move to stimulate
growth, aiding a recovery in European and Wall Street shares.
ID:nL4N1101XE
Brent LCOc1 settled up 52 cents at $43.21 a barrel, after
hitting $42.23 on Monday, its lowest since March 2009.
"Forty dollars a barrel is not sustainable because only
Middle East and some shallow water players can profit at that
level," Herve Wilczynski of Houston-based A.T. Kearney's Oil &
Gas Practice said, giving a reason for the rebound.
U.S. crude CLc1 ended the session $1.07 higher at $39.31,
advancing from $37.75, its lowest since February 2009 set in the
previous session.
"We're practically oversold on oil at this moment and we
can't keep going down in a straight line," said Tariq Zahir,
managing member at Tyche Capital Advisors in Laurel Hollow, New
York. "That said, I wouldn't hold my breath on a proper recovery
yet."
Expectations of another build in U.S. crude stockpiles last
week amid refinery outages could pressure the market again,
traders and analysts said. A Reuters poll forecast stockpiles
rose a million barrels last week, adding to the previous week's
2.6 million-barrel build. EIA/S
Industry group American Petroleum Institute will issue a
stockpile report at 4:30 p.m. EDT (2030 GMT), before Wednesday's
official data from the U.S. Energy Information Administration.
U.S. gasoline futures RBc1 , kept a lid on crude's
recovery, tumbling 2 percent to seven-month lows due to the
restart of a key Midwest refinery unit and the approaching end
of the summer driving season. ID:L1N11019Q ID:nL1N110147
Some analysts expect further deterioration in China's growth
and also a U.S. rate hike by the year-end that could add to the
dollar's rally, putting more weight on commodities.
"That puts further cracks into the two main growth pillars
for the world economy of recent years: Chinese demand (including
commodities) and easy money," HSBC's co-head of Asian economics
research Frederic Neumann said.