Oil prices surged as much as nearly 20% on Thursday, bouncing back from days of heavy losses in a relief rally that may yet be short-lived, analysts warned, but which was stoked by economic stimulus efforts to ward off a global coronavirus recession.
Brent crude LCOc1 was up $2.10, or 8%, at $26.98 a barrel by 0028 GMT after tumbling 13% on Wednesday in a third day of relentless selling. U.S. oil CLc1 gained $3.44, or 17%, to $23.81 a barrel after slumping nearly 25% in the previous session.
"After a 24% crash, oil prices are firming up on some selling exhaustion and as U.S. and European leaders unleash ... aid and stimulus," said Edward Moya, senior market analyst at OANDA in New York.
In the latest move by a central bank to try to halt the spiraling economic and financial crisis sparked by the coronavirus epidemic, the European Central Bank kicked off a 750 billion euro ($820 billion) emergency bond purchase scheme after an unscheduled meeting on Wednesday.
Still, the spread of coronavirus showing no sign of abating. Countries on every continent have resorted to drastic lockdowns, steps to try to tame a virus that has now infected more than 200,000 people worldwide, killing more than 8,000, with a major global recession in prospect.
OANDA's Moya cautioned that the selling could start again in oil markets.
"A bottom for oil is not in place, but we could finally see some stabilisation if financial markets can maintain a somewhat constructive tone with all the stimulus that is about to hit," he said.