U.S. oil prices rebounded more than $1 a barrel from 12-year lows on Thursday, posting their biggest daily gain this year as rallying financial markets gave some bearish traders reason to take profits on record short positions.
U.S. crude briefly vaulted back to $30 as hopes for easier monetary policy from Europe fueled a recovery in European and U.S. stock markets. WTI futures settled up 4.16 percent, or $1.18, at $29.53 a barrel.
Prices did not falter on U.S. data showing a larger-than-expected rise in record high crude and gasoline stockpiles. Instead, the report triggered buying among traders who had feared the figures could be even worse.
Still, few traders expected a quick recovery from this year's 20 percent slump, with oil under pressure from a deepening supply glut and signs of economic weakness in China.
"The fundamentals are still weak and you still have worries about economic growth and its impact on fuel demand, so this is probably a sign that things have been overdone more than anything else," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
He said the market was going to be vulnerable to small turnarounds, given this year's free-fall.