Oil prices jump by more than a quarter on expectations that OPEC+ will hold a virtual meeting to reinstate efforts to support the collapsing market.
Brent crude price rose to $34.11 per barrel and WTI increased to $28.34 per barrel.
Only a week earlier, a $2 trillion stimulus package from the US government was not enough to stabilize the market which had dropped to levels not seen since the early 2000s.
The slump follows global isolation measures that have decimated oil demand all over the world. That is because almost two thirds of the world’s daily oil consumption goes as fuel for transportation.
Global oil demand is about 100 million barrels of oil per day. Some forecasters predict as much as a quarter of that has disappeared in the past few weeks.
It means that global energy demand is in free fall and consumption may decline by as much as 25 to 30 million barrels a day.
That will force many producers of high cost barrels worldwide to slash output.
The loss of so many barrels represents a structural shift in oil market dynamics and the supply- and-demand balance.
This is reflected by the sudden drop in the miles traveled by cars and buses and the closure of borders, paralyzing travel both within and between countries.
Global refiners have slashed their crude oil runs while the coronavirus outbreak has sent refinery margins crashing as transport fuel demand evaporates.
With the coronavirus pandemic cutting oil consumption across the world, the boom in demand for storing oil has been key in absorbing excess barrels from the market in recent weeks.