Brent crude opened Thursday on a low note averaging $27 per barrel with expectations that global oil demand would see a record decline this month.
International benchmark Brent crude was trading at $27.69 per barrel at 0550 GMT for a 0.7% increase after closing Wednesday at $27.69 a barrel. Brent crude fell 6.4% on Wednesday after declining 6.7% on Tuesday when it was trading at around $32 per barrel.
American benchmark West Texas Intermediate (WTI) was around $19.88 a barrel at the same time without any change from the previous day's close. WTI, however, lost 1.2% on Wednesday after plummeting 10.2% on Tuesday when it was around $22 a barrel.
Global oil demand is estimated to fall by a record 29 million barrels per day (bpd) in April, according to the International Energy Agency (IEA) on Wednesday.
The IEA head Fatih Birol said this would make April the worst month in the history of the global oil market, naming it 'Black April'.
While global oil demand is expected to decline by 26 million bpd in May, overall it is estimated to fall by 9.3 million bpd in 2020 because of measures taken to tackle the spread of the novel coronavirus (Covid-19) pandemic.
With transportation limitations and quarantines, oil consumption around the world has declined dramatically, putting massive pressure on crude prices.
Low demand also causes an increase in oil supply, since oil-producing countries within OPEC+ will only start their production cuts on May 1, leaving the market with a rising glut until then.
In U.S., the world's largest crude producer and consumer, weak oil demand caused a surge in crude oil inventories. Commercial crude oil inventories rose by 19.2 million barrels, or 4%, to 503.6 million barrels for the week ending April 10, much higher than the market expectation of an increase of 11.7 million barrels.
By Ovunc Kutlu