Oil prices jumped on Thursday, as signs the U.S. crude glut was not growing as quickly as many had feared brought an upbeat close to one of the most volatile months for oil trading in history.
Fuel demand worldwide slumped about 30% in April. Even after major oil producers led by Saudi Arabia agreed to slash production by nearly 10 million barrels per day (bpd), U.S. crude futures closed on April 20 at a record low in negative territory.
That collapse in U.S. West Texas Intermediate futures made traders frantic to avoid taking delivery as the front-month contract expired, forcing traders to pay $37.63 a barrel at settlement to get rid of their contracts.
Prices have recovered somewhat but remain sharply down year to date.
On Thursday, the last day as the front-month, Brent futures for June delivery rose $2.73, or 12.11%, to $25.27 a barrel. West Texas Intermediate crude for June delivery jumped 25%, or $3.78, to settle at $18.84 per barrel.
Brent, the international benchmark, is on track to gain about 12% in April after falling more than 65% over the prior three months. WTI, meanwhile, is on track for its fourth month of declines, with a 12% loss in April and a 70% fall so far this year.
The more actively traded Brent futures for July, which will soon be the front-month, were up about 6% to $25.77 a barrel.
Volume in WTI futures on the New York Mercantile Exchange were set to top 35 million contracts in April, which Refinitiv data puts as second only to the previous month's 40.9 million record.
U.S. crude inventories grew by 9 million barrels last week to 527.6 million barrels, Energy Information Administration data showed, below the 10.6 million barrel rise analysts expected in a Reuters poll.
"If we see a continuation of this trend in the coming weeks, it could suggest the worst might be behind the oil market," ING's head of commodities strategy Warren Patterson said.
Western Europe's largest oil producer, Norway, said it would lower output from June to December, cutting production for the first time in 18 years as it joined other major producers' efforts to support prices and curb oversupply.
The crisis prompted Royal Dutch Shell Plc to announce its first dividend cut since World War Two.
U.S. oil and gas company ConocoPhillips said it would sharply reduce oil production in coming weeks, aiming to shut in 35% of its total output by June.
Storage concerns continue to weigh with the International Energy Agency saying global capacity could peak by mid-June.
U.S. President Donald Trump said his administration would soon release a plan to help U.S. oil companies.
Nine companies including Chevron Corp and Exxon Mobil Corp have agreed to rent space to store 23 million barrels of crude in the U.S. emergency oil reserve.