IHS Markit Vice Chairman Daniel Yergin argues the next four weeks will be a particularly rough time for the oil industry as demand stays low.
Oil prices spiked Wednesday after data showed inventories swelled less than expected.
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West Texas Intermediate crude oil, the U.S. benchmark, jumped 26 percent to $15.55 a barrel, receiving a boost from a trial indicating that Gilead Sciences’ drug remdesivir showed promise in treating COVID-19.
Shelter-at-home orders during the pandemic have slashed fuel demand, dragging prices already hurt by a dispute between Saudi Arabia and Russia even lower.
WTI rose sharply after the American Petroleum Institute said U.S. stockpiles rose by 10 million barrels in the week through April 24, slightly less than the 10.6 million barrels that analysts were expecting.
Brent crude, the international benchmark, was up 11 percent at $22.73.
“It can go without saying that last night’s update was bearish,” wrote Stephen Schork, founder and editor of the daily oil subscription newsletter The Schork Report.
The API report showed crude oil stockpiles at Cushing, Oklahoma, a key U.S. oil hub, increased by 2.49 million barrels. Ahead of the API’s report, Cushing inventories had swelled to 59.7 million barrels, according to the U.S. Energy Information Administration. The storage facility tops out at about 76 million barrels.
The EIA’s official report will be released at 10:30 a.m. ET. An agreement reached earlier this month to cut production by 20 million barrels per day is set to go into effect on May 1.
