Oil held most of the previous day’s strong gains Thursday, but traders remain on edge over the long-running supply glut.

Oil held most of the previous day's strong gains Thursday, but traders remain on edge over the long-running supply glut.

Around 1130 GMT, US benchmark West Texas Intermediate (WTI) for delivery in April slid 13 cents at $38.16 a barrel.

Brent North Sea crude for May delivery lost 28 cents to $40.79 a barrel compared with Wednesday's close.

The market had rallied Wednesday as falling US gasoline inventories boosted the demand outlook in a global market awash in crude supplies.

Both main contracts soared on Wednesday, with US benchmark West Texas Intermediate hitting a more than three-month high and Brent breaking $41 after a US energy department report.

The figures showed gasoline inventories plunged three times faster than expected, while the country's commercial crude stockpiles rose almost two-thirds less than forecast.

"The initial gut reaction of the market to the release of the weekly statistics on US oil inventories was a buying frenzy that lasted until the close," said PVM analyst Tamas Varga.

Analysts said it remains to be seen whether the price rise would be sustained, especially after China this week reported a plunge in exports in February, stirring renewed fears of a "hard landing" for the world's second biggest economy.

"I'm still not leaning towards prices moving up sustainably because the fundamentals have not changed," said Phillip Futures analyst Daniel Ang.

He pointed to US crude production, which he said rose marginally last week after weeks of decline, describing it as "rather bearish" for prices.

EY oil and gas analyst Sanjeev Gupta said the market was looking forward to a March 20 meeting of major crude producers to discuss an output freeze proposed by key players Russia and Saudi Arabia aimed at stabilizing prices.