Brent crude futures rose $2.51, or 7.3%, to $36.87 a barrel by 0418 GMT, while U.S. West Texas Intermediate (WTI) crude gained $2.15, or 6.9%, to $33.28 a barrel.
Both benchmarks plunged 25% on Monday, dropping to their lowest since February 2016 and recording their biggest one-day percentage declines since Jan. 17, 1991, when oil prices fell at the outset of the U.S. Gulf War.
Trading volumes in the front-month for both contracts hit record highs in the previous session after a three-year agrement between the pact occured by Saudi Arabia and Russia and other major oil producers to limit supply fell apart on Friday.
Asian stocks and bond returns have risen from historically low levels as warnings from global stocks and governments have calmed speculation and panic sales.
As the demand for oil is still unable to recover from the economic impact of the coronavirus outbreak, in addition to the prospect of earnings being temporary, crude oil is backed in the hope of potential US production cuts.
Saudi Arabia plans to increase its crude production from 9.7 million bpd to 10 million barrels per day (bpd) in April and has reduced its export prices to encourage more purchases. Russia said it could increase its production and cope with low oil prices for six to 10 years. After all that happened, the US could reduce production after bringing all here.
The current conditions also pose a threat to the US drilling industry, which has transformed the US into the world’s largest producer of petroleum and shale who plays a historic role as a defender of low energy prices, and is an important part of the US economy.This drop could push many US manufacturers into bankruptcy which have already been hit by record low natural gas prices.