Brent futures rose 1.2%, or 41 cents, to $ 33.25 a barrel at 5:29 am GMT. The contract reached an intraday high of $ 33.90, climbing for a second day.
West Texas Intermediate (WTI) crude futures rose 3.3%, or 82 cents, to $ 25.91 per barrel, after climbing 6.1% earlier.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia – a group known as OPEC + – are scheduled to hold a meeting by videoconference on Thursday.
The meeting is expected to be more fruitful than their March meeting, where they did not agree to extend the supply cuts and sparked a price war between Saudi Arabia and Russia.
Hope for a deal to cut 10 to 15 million barrels a day (b / d) has risen after media suggested Russia was ready to cut output by 1.6 million b / d and the Algerian energy minister said he expected a “fruitful” meeting.
Such a large reduction would be far greater than any production reduction ever agreed to by OPEC.
“We look forward to it,” said Lachlan Shaw, manager of commodity research at National Australia Bank.
“I think there will be a deal, which will bring some joy in the short term. Then everyone’s attention will focus on the fundamentals. The fundamentals are appalling, “he said.
Following the OPEC + meeting, energy ministers from the Top 20 Economies Group are expected to meet to find ways to reduce the impact of the COVID-19 pandemic on world energy markets.
“If the G20 came out and talked about increasing strategic reserves, it would be taken positively,” said Shaw.
However, with oil prices having lost half their value since the start of the year and demand for oil expected to fall by 30%, analysts are skeptical about the effectiveness of a drop in OPEC + for substantiate prices.
“In the end, the magnitude of the demand shock is just too great for a coordinated reduction in supply,” Goldman Sachs said in a note.
In addition, given the rapid increase in oil inventories, the market should still be inundated with cheap oil, even when demand picks up.
Data from the U.S. Energy Information Administration on Wednesday showed that crude inventories rose 15.2 million barrels, their largest gain in a week.