Crude oil prices have continued their recovery from their lowest level in four years as markets opened with gains on Wednesday on the hopes that economic stimulus in the U.S. would trigger an increase in global oil demand.
International benchmark Brent crude was trading at $38.16 per barrel at 0603 GMT on Wednesday for a 0.87% jump after closing Tuesday at $37.83 a barrel with a 10.10% increase.
American benchmark West Texas Intermediate (WTI) was at $34.98 a barrel at the same time for a 2.73% increase after ending the previous session at $34.05 per barrel with a 9.38% gain.
U.S. President Donald Trump met Tuesday with Republican lawmakers, and proposed a payroll tax rate cut of 0% until the end of 2020 to mitigate the negative effects of coronavirus on American economy.
Trump's stimulus plan was perceived positively as indexes in the U.S. stock market ended Tuesday with 5% gains. Investors hope that oil demand in the world's biggest oil consumer could increase in the second quarter of 2020 to provide support for crude prices.
On the demand side, however, Saudi Arabia and Russia planning to increase their crude oil production levels in April continue to create downward pressure on prices.
Saudi Aramco said Tuesday it would provide its customers with 12.3 million barrels per day (bpd) of crude oil starting from April 1, which would be a dramatic increase from its 9.7 million bpd in January.
Moscow said it may boost its crude production by 250,000-300,000 bpd in the short term and up to 500,000 bpd in the longer term.
Saudi-led OPEC and Russia-led non-OPEC failed Friday on a deal to provide deeper cuts in their oil production levels.
Brent crude fell to $31.27 per barrel and WTI plummeted to $27.34 a barrel on Monday to mark their lowest levels since February 2016. Both benchmarks' daily loss of over 30% was the largest single-day percentage decline since the Gulf War in January 1991.
By Ovunc Kutlu