Oil futures jumped 10 percent on Thursday, in the biggest one-day gain in over six years, prompted by rallying stock markets, news of diminished supplies and apparent moves by Venezuela to try and arrange OPEC action to curb the global slump in oil prices.
U.S. oil rose $3.96, or 10.3 per cent, to $42.56 in New York, rebounding from over six-year lows of $40 this week. That is the biggest gain since March 12, 2009, when oil gained 11 percent. Brent crude rose 10.3 per cent to $47.56 a barrel in London, the Associated Press reported.
The rally was helped by Royal Dutch Shell declaring force majeure on shipments of Nigeria’s Bonny Light crude oil after shutting two pipelines, the Financial Times reported, resulting in supplies cutting from Africa’s biggest oil producer being cut.
In addition, investor sentiment was boosted by a report showing the U.S. economy grew faster than previously reported in the second quarter, helping the Dow industrials DJIA climb 2.27% Thursday. In China, the Shanghai Composite Index surged 5.3 percent to end a five-day losing streak, according to Marketwatch.
The Wall Street Journal reported that economically struggling Venezuela has been contacting other Organization of Petroleum Exporting Countries (OPEC) members to push for an emergency meeting in coordination with Russia to come up with a strategy to stop the current oil price rout. OPEC is not scheduled to meet until Dec. 4, and has rebuffed previous calls for an emergency meeting.
Analysts, however, said that they did not believe Thursday's rally was an indicator of a long-term rise in oil prices.
"One up day in a sea of consistent summer selling does not make for an imminent recovery in crude oil, or in gasoline," Tom Kloza, global head of energy analysis at Oil Price Information Service, told the Associated Press.
Even the most bullish forecasters are conceding that oil prices are unlikely to stage a significant rebound soon, Reuters reported. On Wednesday, Standard Chartered slashed its 2016 Brent crude oil forecast by $20 to $63.