Oil gained on Thursday as producers slashed production to compensate for weak demand.
Brent crude rose 1.6%, or 33 cents, at $20.70 per barrel. U.S. West Texas Intermediate futures climbed 2%, or 28 cents, at $14.06 per barrel. U.S. crude futures plunged to below minus $40 as storage space ran out.
In the United States, Oklahoma’s energy regulator said that companies could close down wells and retain their leases. U.S. producers have sought safety after the market crashed over a rise in production.
OPEC and its allies including Russia have agreed on a 9.7 million bpd production cut that will begin on May 1. However, analysts say that further cuts may be needed to make up for weak demand.
Russia’s Baltic loadings of Urals crude grade are expected to be 36% lower year-on-year.
U.S. reserves of crude, gasoline, and distillate fuels increased as stockpiles filled across the world.
U.S. crude inventories gained 15 million barrels to 528.6 million barrels on April 17.
Oil reserves are expected to rise in the coming weeks as governments purchase oil to make up for oversupply.