Oil rises after huge selloff, outlook weak

LONDON (Reuters) - Oil rose on Tuesday after one of its biggest sell-offs this year but looked vulnerable to more falls after China's stock market took another tumble and Greece moved closer to leaving the euro zone.

Investors also kept a close eye on talks in Vienna over Tehran's nuclear programme that could lead to increased exports of Iranian crude at a time of global oversupply.

Brent crude for August was up 70 cents at $57.24 a barrel by 0920 GMT (5.20 a.m. EDT), following a more than 6 percent drop in the previous session. On Monday, Brent briefly touched $56.38, its lowest since April 10.

U.S. crude traded at $53.10 a barrel, up 57 cents from the close on Monday, when it reached levels last seen in mid-April.

Despite the rally, most analysts were bearish.

"After yesterday's sharp and fierce sell-off it is impossible to paint an even remotely bullish technical picture," said Tamas Varga, analyst at brokerage PVM Oil Associates.

"The downtrend should resume shortly."

London-based Energy Aspects also saw more "downside risk":

"Macroeconomic headwinds are rising ? be it in the form of the collapse in the Chinese stock market, Greece's potential exit from the euro zone or a stronger dollar."

Consultancy FGE Energy said it had a negative outlook.

"Prices (for Brent) are effectively capped below $70 per barrel in the near term. Structurally, the market is about 1

million barrels per day over-supplied through end-2016," FGE Energy said in a note to clients.

The global oil glut could deepen if major powers and Iran reach a nuclear compromise that could end sanctions against Tehran and open up exports of crude.

"We hear an Iran nuclear deal may be about to be announced, and that is bearish if it means early sanctions relief and more Iranian oil sooner rather than later," said Olivier Jacob, energy markets analyst at Swiss consultancy Petromatrix

Expectations of Iranian exports resuming in 2016 have pulled down forward oil prices more than those closer to the present.

The outlook for oil demand looks grim as Greece struggles to remain in the euro and key consumer China faces a sharp stock market selloff.

Chinese equity markets have fallen 30 percent since June, prompting the government to resort to a series of support measures to stabilise shares. The measures have so far had only limited effect.

(Additional reporting by Henning Gloystein in Singapore; Editing by Dale Hudson and William Hardy)