Oil prices rose for the second consecutive day on Wednesday as markets clung to potential production cut by U.S. producers. However, increase in prices were smaller compared to the crash on Monday after Saudi Arabia started a price war with Russia.
West Texas Intermediate jumped 3.3%, or $1.12, at $35.48 per barrel, while Brent crude futures gained 3.9%, or $1.44, at $38.66 per barrel.
Occidental Petroleum joined other oil producers in North America in cutting spending and drilling after prices suffered deepest falls in over three years.
Oil and equity markets recovered on Tuesday after recent days’ slump, lifted by rumors of coordinated policy stimulus by central banks and governments globally to soften the blow of the epidemic.
But doubts on Washington’s implementation of a stimulus package to combat the effects of the virus caused Asian shares to cut its rally short.
Saudi Arabia stated that it would raise oil production to record highs by April, intensifying a price war with Moscow, which had suggested to go through additional talks on supply levels.
The price war between the two major oil producers sent crude prices to a drawback by 25%.
Alexander Novak, Russia’s oil minister said that he did not close out coordinated measures with OPEC to steady the market. However, Saudi Arabia’s energy minister said that an OPEC+ meeting was not necessary if the parties did not agree to particular measures in combating the virus’ impact on oil prices and demand.
Meanwhile, U.S. crude oil inventories gained in the recent week, while gasoline and distillate stocks fell.
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