- WTI crude futures for June delivery rose $3.57, or 30.9%, to $15.14 a barrel.
- Since the start of the year, Brent has fallen more than 65%, while WTI has dropped around 75%.
NEW YORK: Brent crude oil rose 8.4% on Wednesday, as prospects for extra pledges from major producers to cut output prompted a sharp turn up off a session low that took the global benchmark below $16 a barrel to its lowest since 1999.
Oil trading has been more volatile than ever in recent days on prospects that a historic supply glut will swell even further as coronavirus lockdowns slash demand for fuel. Brent touched $15.98 a barrel, its lowest since June 1999. By 1458 GMT, it was up $1.63, or 8.4%, to $20.96 a barrel, a 8.4 percent gain.
U.S. West Texas Intermediate (WTI) crude futures for June delivery rose $3.57, or 30.9%, to $15.14 a barrel. Traders were encouraged that gasoline inventories did not balloon as much as forecasters had feared.
Since the start of the year, Brent has fallen more than 65%, while WTI has dropped around 75%.
In the latest sign of excess supply, U.S. crude stocks inventories rose by 15 million barrels in the week to April 17 to 518.6 million barrels, the Energy Information Administration said on Wednesday, in line with analysts' expectations in a Reuters poll for a 15.2 million-barrel rise.
Meanwhile, U.S. gasoline stocks rose by 1 million barrels in the week to 263.2 million barrels.
“Gasoline inventories came in not as high as expected," said Phil Flynn, an analyst at Price Futures Group. “Based off of that, it wasn't the disaster that the market had been expecting."
“There were rays of hope in the report that maybe we're stabilizing on the demand destruction."
This week the front-month U.S. contract fell below zero for the first time ever ahead of its expiry as panicking traders paid customers to take oil off their hands so they would not have to take delivery with nowhere to store the surplus.
“If storage continues to increase at the end of the day, which seems likely considering all these Saudi barrels knocking at the door, then we are going to get to maximum storage sometime in the not so distant future," said Bob Yawger, director of futures at Mizuho in New York.
Demand has crashed as governments order residents to stay at home, restricting travel and halting daily life, to stop the spread of coronavirus. The virus has infected 2.57 million globally, killing 178,574 people.
In an effort to curb supply and prop up prices, OPEC and allied producers, including Russia, agreed this month to reduce output by 9.7 million bpd, starting from May. But the deal has done little to restore optimism and boost prices.
Now, producers are considering further steps.
Saudi Arabia on Tuesday said it was ready to take extra measures with other producers and Iraq made similar comments. The next formal OPEC+ meeting is in June.
The United States and other countries also said this month they would pump less.
But in a development that raises doubt over a formal U.S. supply cut, two of three Texas regulators on Tuesday delayed a vote to force producers to curtail output.