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Oil gained on Thursday and U.S. crude recovered from nearing 20-year-lows on hopes that inventories will build up. This could leave oil producers no option but to further production cuts as demand weakened amid the crisis.
Brent crude rose 2.5%, or 69 cents, at $28.38 per barrel. U.S. West Texas Intermediate was up 2.8%, or 56 cents, at $20.43 per barrel.
The International Energy Agency forecasted that oil would drop 29 million bpd in April, right below 30% of the global demand before the coronavirus pandemic.
OPEC and its allies agreed to slash output by 9.7 million bpd, while non-OPEC producers including the United States also planned to cut production by 20 million bpd.
The U.S. Energy Information Administration said that output will likely drop 470,000 bpd.
Countries worldwide also plan to fill their strategic reserves, but there are limits to oil purchases.
Stephen Innes, chief global market strategist at AxiCorp said that further production cuts are necessary to prevent another collapse in oil prices.