Oil prices were up on Wednesday as investors went on a bargain spree after the last session’s decline and on hopes that countries will fill their strategic reserves. However, threats of a global recession and oversupply prevented further gains.
Brent futures rose 1.3%, or 38 cents, at $29.98 per barrel. U.S. West Texas Intermediate crude was up 1.8%, or 36 cents, at $20.47 per barrel.
The two benchmarks were undersold by concerns on the futility of the global production cut in compensating for fuel demand.
Crude inventories increased by 13.1 million barrels, totaling 486.9 million barrels in the week ended on April 10. The build was higher than analyst expectations of 11.7 million barrels.
Massive buying of countries to fill their strategic reserves also underpinned the market.
OPEC and its allies including Russia said that the International Energy Agency may reveal millions of barrels’ worth of purchases to support the record output cut.
The U.S. Energy Department said it is in talks with nine energy companies to purchase 23 million barrels of local oil for its oil reserve.
However, the threat of a deep recession looming over the economy weighed on market sentiment.
The global economy is forecasted to fall 3.0% in 2020 in a coronavirus-led collapse, which will be the steepest decline since the Great Depression of the 1930s, the International Monetary Fund said.