West Texas Intermediate (WTI), the New York-traded benchmark for US crude prices, settled up $5.08, or 24.4 percent, at $25.91 per barrel. On Wednesday, WTI settled down 24 percent at $20.38, its lowest in 18 years.
Brent, the London-traded global benchmark for crude, settled up $3.59, or 14 percent, at $28.47 per barrel.
Earlier on Thursday, Energy Secretary Dan Brouillette told reporters that the Trump administration has asked Congress for $3 billion to buy 77 million barrels to top up the Strategic Petroleum Reserve.
The Strategic Petroleum Reserve, which holds the nation’s oil reserves in underground salt caverns in Louisiana, has a total capacity of 713.5 million barrels. As of 15 March, the total volume of crude in its inventory stood at 649.1 million barrels, according to the Energy Information Administration.
The US Energy Department said earlier on Thursday that it will initially purchase up to 30 million barrels of sweet and sour crude oil with a focus on small to midsize US oil producers.
Brouillette told reporters that he expected the second batch of purchases to be made between 60 and 90 days. He also said the Energy Department was taking advantage of the current low crude prices to fill up the SPR and also aid US oil producers facing potentially catastrophic losses from the impacts of coronavirus and the intentional disruption to world oil markets by foreign actors.
Despite Thursday’s rebound, WTI and Brent both remain down about 60% on the year.
Aside from demand lost to the coronavirus pandemic, the US oil industry is also hurting from massive production hikes by Saudi Arabia, which is also offering its crude at much lower prices to poach market share from Russian and American crude exporters.
On 19 March, international agency Fitch Ratings lowered its forecast for the average Brent crude price this year to $41 per barrel. Earlier in the month, S&P Global Ratings also downgraded the Brent crude price forecast for 2020 to $40 per barrel from the previously expected $60.
Earlier in the week, oil prices dropped following the March 6 OPEC+ meeting in Vienna which sparked the crash. OPEC+ failed to reach an agreement amid a Saudi push to raise production cuts by 1.5 million barrels per day through the end of 2020, on top of the 2.1 million barrels per day in cuts already agreed upon.