Oil surges as much as 23%, on track for best day ever, rebounding from Wednesday’s steep losses

U.S. oil jumped as much as 23% on Thursday, putting it on track for its best day on record as it clawed back more than half of the losses from Wednesday’s swoon. U.S. West Texas Intermediate crude gained 21.4%, or $4.37, to trade at $24.74 per barrel. Earlier in the session, it gained more than 23%, hitting $25.66. International benchmark Brent crude rose 12.8%, or $3.18, to trade at $28.06 per barrel.

Given WTI’s 60% decline this year, a smaller gain, of course, now accounts for a much larger percentage move. Thursday’s jump came a day after WTI dropped 24.4% to settle at a more than 18-year low of $20.37. It was WTI’s third worst day on record.

But some firms, including Rystad Energy, believe the measures will be insufficient to stop further demand declines.

“Our current balances suggest that prices will have to drop further, likely to $10 per barrel, or even below in the worst case, to trigger production shutdowns,” Rystad senior oil markets analyst Paola Rodriguez-Masiu said.

Thursday’s gains notwithstanding, WTI is still far from prior highs, and many analysts believe prices will head even lower before any type of turnaround. It’s on pace for its worst month ever after falling more than 46%, and is 63% below its 52-week high from last April. The losses have been swift and steep. As recently as January, WTI traded at $63 per barrel.

Oil is getting hit on the supply and demand sides. A slowdown in worldwide travel and business activity is weighing on demand, just as powerhouse producers Saudi Arabia and Russia prepare to ramp up production. As demand grinds to a halt, the OPEC+ production cuts expire at the end of the month, meaning nations will soon be allowed to pump as much as they please.

Oil surges as much as 23%, on track for best day ever, rebounding from Wednesday’s steep losses, CNBC, Mar 19