Free MCX tips : Crude oil bounced back in the domestic market on Tuesday as the sharp losses suffered by the energy commodity over the past several sessions offered traders, a good bargain buying opportunity in the fuel at existing levels.

Oil had tanked nearly 7 per cent in the previous two sessions amidst fears that Iran may unleash millions of barrels of its crude that it is presently hoarding, once international sanctions against the Islamic nation are lifted, while higher drilling activity in the US signaled a pickup in production ahead, threatening to widen a global supply glut.

Further, a drop in US storage levels eased concerns of oversupplies as the API reported a 2.4 million barrels decline in stockpiles last week.

A rebound in China’s stock markets eased worries over the demand outlook in the world’s second biggest oil consumer.

China’s benchmark index, the Shanghai Composite surged over 3.5% on Tuesday, snapping a three-day losing streak, after the country’s officials unveiled more measures to stem the steep stock market rout including curbs on short selling.

Meanwhile, US factory orders rebounded in June, reversing two months of decline, up 1.8 per cent from May, while a gauge of New York manufacturing rose at the fastest pace this year, signaling a pickup in the world’s largest economy, lifting the demand outlook for the fuel.

The ISM New York manufacturing index climbed to 68.8 in July from 63.1 in June, with a reading above 50 signaling expansion.

Oil may extend an advance today as a surge in Chinese services activity signals an improving health of the world’s second biggest economy, auguring well for the fuel’s demand prospects.

At the MCX, Crude oil futures, for the August 2015 contract, closed at Rs 2,935 per barrel, up by 0.58 per cent, after opening at Rs 2,925, against the last close price of Rs 2,918. It touched an intraday high of Rs 2,959.