But international Brent futures were up 6 cents at $40.45 a barrel.

While Morgan Stanley said that oil prices had likely bottomed out, it warned that a slowing economy and high production would prevent sharp rises.

"Oil prices now seem to have bottomed, even though they are likely to stay subdued for the rest of this year before starting to move higher in 2017," the US bank said, adding that cheap oil had not provided the economic boost to growth that many had hoped for.

"When oil prices are falling below production costs, the income gains for consumers will be smaller than the costs to producers and falling oil prices become a negative-sum game," it said.

For 2016, the bank said it was "no longer looking for an acceleration in 2016 GDP growth" and that the risk of a global recession was now 30%.

Following a 70% price rout between mid-2014 and early 2016, oil markets are in flux.

Many analysts expect a modest price recovery, while others see another slump.

The International Energy Agency (IEA) on Friday said that oil prices had bottomed out due to US and other output cuts outside the Middle East-dominated Opec member countries.

The US rig count fell for a 12th straight week last week to a total of 386, its lowest since December 2009 as drillers continue to slash capital expenditure.

Others, like Goldman Sachs, warn that ongoing global overproduction, which continues to see over 1 million barrels of crude produced in excess of demand every day, will pull prices back down again.

So far, demand in core markets like China remains strong.

China's January-February refinery throughput rose 4.6% compared to the same period a year earlier to 10.59 million barrels per day, official data showed on Saturday.

The data release came shortly after China reported record daily crude imports of 8 million bpd.

In traded markets, sentiment leans towards higher prices, with the amount of managed short positions open for US crude, which would profit from falling prices, down over 40% since mid-February, while the amount of trades betting on price increases stands near record highs.

"The shift in sentiment in commodity markets continues to gather strength ... The worst may be over for commodity markets," ANZ bank said.