US oil prices surge after massive fall
US oil rebounds
US oil prices jumped on Wednesday after falling below zero for the first time at the start of the week due to a coronavirus-triggered collapse in demand.
US benchmark West Texas Intermediate for June delivery was up almost 10 per cent at $12.68 a barrel, paring gains of around 20 per cent at the open in Asia.
The market has been under heavy pressure due to massive oversupply as lockdowns and travel restrictions introduced worldwide to stem the spread of the coronavirus hammer demand. US crude has been particularly hard-hit due to storage problems, as WTI is delivered at a single, inland point.
WTI for May delivery on Monday collapsed to an unprecedented low of minus $40.32 as traders scrambled to sell it before the contract expired Tuesday, but could find few buyers with storage capacity fast filling up.
European benchmark Brent crude for June delivery bounced more than 2 per cent at the open, but then reversed gains and was trading around 3 per cent lower, with a barrel changing hands for $18.73.
It had tumbled to an 18-year low the previous day.
The oil crisis was worsened by a price war between Saudi Arabia and Russia. They drew a line under the dispute earlier this month and, along with other top producers, agreed to slash output by almost 10 million barrels a day to shore up coronavirus-hit markets.