Oil bounced back on Wednesday, with U.S. crude jumping over $1, lifted by hopes that a meeting between OPEC members and allied producers on Thursday will trigger output cuts to shore up prices that have crumbled amid the coronavirus pandemic.
Brent crude was up by 75 cents, or 2.4 per cent, at $32.62 per barrel by 0246 GMT after falling 3.6 per cent on Tuesday. U.S. West Texas Intermediate (WTI) crude rose $1.30, or 5.5 per cent, to $24.93 a barrel after dropping 9.4 per cent in the previous session.
Thursday's video-conference meeting between members of the Organization of Petroleum Exporting Countries (OPEC) and its allies, including Russia, is widely expected to be more successful than their gathering in early March. That ended in failure to extend cuts, and a price war between Saudi Arabia and Russia amid slumping demand.
But doubts remain over the role of the United States in any production curbs.
"Whether the United States will join output cuts is closely watched as the market's focus remained on OPEC meeting," said Kim Kwang-rae, commodity analyst at Samsung Futures in Seoul. "Oil prices have been volatile as the market is in wait-and-see mode."
Saudi Arabia, OPEC member countries and Russia are likely to agree to cut output, but that accord could be dependent on whether the United States would go along with cuts. The U.S. Department of Energy said on Tuesday that U.S. output is already declining without government action.
"Saudi Arabia and Russia continue to hammer out a deal ... What is clear is that the United States must be involved," ANZ Research said in a note.
U.S. crude production, meanwhile, is expected to slump by 470,000 bpd and demand is set to drop by about 1.3 million bpd in 2020, the U.S. Energy Information Administration (EIA) said on Tuesday.
U.S. crude inventories jumped by 11.9 million barrels to 473.8 million barrels in the week to April 3, according to data from the American Petroleum Institute (API) released on Tuesday.
With a drop in fuel demand amid the virus outbreak, gasoline stocks also rose by 9.4 million barrels, marking the biggest one-week gain in the API figures since January 2017.
Official data from the EIA is due at 10:30 a.m. EDT (1430 GMT) on Wednesday.