Oil prices rallied sharply on Tuesday, regaining $32 per barrel as traders mulled talk of an OPEC-Russia coordinated output cut to curb oversupply.

At about 1800 GMT, Brent North Sea crude for delivery in March jumped $1.84 at $32.34 per barrel.

US benchmark West Texas Intermediate for March added $1.69 to $32.03 a barrel compared with Monday's close.

The market also rebounded as traders took the opportunity to snap up cheap crude, having hit 12-year lows last week on chronic oversupply.

"Vague talk of a possible joint production cut with Russia and OPEC is doing the rounds again," noted CMC Markets analyst Jasper Lawler.

"Any joint action seems unlikely since US shale producers would just use the resulting higher prices as an opportunity to ramp up their own (output) again."

The Kuwaiti and Iraqi oil ministers declared Tuesday that OPEC will not cut production unless producers outside the cartel do the same, despite plunging crude prices that have ravaged its revenues.

"OPEC cannot cut its production unless there is a similar reduction by producers outside OPEC," Kuwait's acting oil minister, Anas al-Saleh, told reporters on the sidelines of an oil conference.

"I don't see any logic in OPEC cutting production while non-OPEC (countries) don't cut," Saleh said.

Iraqi Oil Minister Adel Abdulmahdi said his country was "ready to cooperate" on cutting production to raise oil prices but only if non-OPEC producers did as well.

The 12-nation Organization of Petroleum Exporting Countries (OPEC) has refused to cut production despite the recent collapse in oil prices.

Led by Gulf producers, the cartel is refusing to reduce crude output as it seeks to drive less-competitive players, including US shale producers, out of the market.

In rollercoaster trade last week, oil briefly plunged to 12-year lows under $27 but bounced higher Friday on hopes that more possible stimulus measures in the eurozone and Japan would perk up demand.

However, the rally almost fizzled out Monday as stubborn oversupply fears resurfaced.

"The expectations around central banks unleashing stimulus measures ... provided false hopes for bullish investors, who have fallen victim to the sharp declines led by the intensifying concerns around the excessive oversupply of oil," said research analyst Lukman Otunuga at traders FXTM.

WTI shed 5.7 percent and Brent lost 5.2 percent in value on Monday.

"The catalyst for yesterday's slippery crude sell-off that took the commodity back below $30 was put down to continued global oversupply as US supply is seen expanding the glut," said analyst Michael van Dulken at Accendo Markets.

A strengthening US currency also helped depress demand for dollar-priced oil, which becomes more expensive for holders of weaker units.

The dollar had climbed ahead of the outcome of the US Federal Reserve's latest monetary policy meeting, which wraps up on Wednesday.

Dealers said investors are looking for an insight into the Fed's thinking, just six weeks after announcing the first US interest rate hike since 2006.

The market is also anticipating the return of Iranian oil exports, which would further add to the oversupply.