Oil edged higher Thursday following sharp losses in the earlier session on hopes that a big build-up in U.S. inventories may imply producers have little choice; however, to deepen production cuts as the coronavirus pandemic ravages demand.
With official data displaying U.S. inventories surging the most on record, WTI plunged Wednesday to its lowest since February 2002, with Brent plunging over 6%.
Brent crude was up 36 cents at $28.05 per barrel. U.S. West Texas Intermediate (WTI) was up 10 cents at $19.97.
Concerns about crumbling demand kept a cap on gains with both contracts having traded more than 2.5% higher earlier in the session.
Energy Information Administration (EIA) data additionally showed large U.S. refined fuels stockpiles regardless of refiners operating at 69% of capacity nationwide, the lowest since September 2008.
The figures followed a report from the International Energy Agency (IEA) that estimated oil demand would fall by 29 million barrels per day (BPD) in April, to the lowest in 25 years, and below 30% of global demand before the coronavirus outbreak.
That number is well above output reductions in the pipeline. OPEC+ have agreed to cut production by 9.7 million BPD, while hoped-for reduction of another 10 million BPD from other nations along with the U.S. might lower production by 20 million BPD.