LONDON  - World oil prices rebounded on Wednesday from sharp losses as traders awaited the weekly snapshot of energy inventories in top crude consumer the United States.

Brent North Sea crude for delivery in May increased by 32 cents to $124.44 a barrel in London morning trade. New York’s main contract, West Texas Intermediate crude for May, added 52 cents to $106.59 a barrel. Crude futures had fallen sharply on Tuesday, plunging almost $2.50 a barrel in New York, after Saudi Arabia repeated its pledge to make up for lost Iranian output, easing supply concerns. “Today, crude oil prices are correcting higher, tracking a broader rally in risk assets as the dollar eases back from yesterday’s gains,” Sucden commodities analyst Jack Pollard.

A weaker greenback makes dollar-priced crude cheaper for buyers using stronger currencies, which in turn tends to stimulate oil demand and support higher price levels. Later on Wednesday, the market will switch attention to crucial energy inventory data from the United States, which is the world’s biggest oil-consuming nation. “Today, market participants will pay close attention to the weekly US fuel inventory report,” said VTB Capital analyst Andrey Kryuchenkov.

“We expect higher import numbers and little change to US refining rates to drive US crude stockpiles higher.”

American crude oil reserves are forecast to have risen by 2.4 million barrels in the week ending March 16, according to analysts polled by Dow Jones Newswires.

Saudi Arabia has meanwhile insisted over the past few weeks that it would make up for a supply shortfall to compensate for lost Iranian output as Western sanctions over Tehran’s suspected nuclear weapons program take effect.

The assurances from Saudi Arabia come as the international community ramps up sanctions on Iran — the world’s fourth-largest oil producer — to halt its nuclear activities, which Iran insists is for peaceful purposes only.

The International Monetary Fund on Tuesday warned that an abrupt, large spike in oil prices caused by Iranian shortages could hammer global growth.

IMF managing director Christine Lagarde estimated that crude oil prices might spike by up to 30 percent if Iranian supplies were disrupted, causing “serious consequences” for the global economy.