SINGAPORE - Oil prices rose by more than $2 on Friday, building on gains in the previous session after U.S. President Donald Trump hinted he may intervene in the price war between Saudi Arabia and Russia.
Prices were also supported by U.S. plans to buy up to 30 million barrels of crude oil for its emergency stockpile by the end of June and reports that regulators in its largest oil-producing state Texas might curtail output.
The more active West Texas Intermediate (WTI) crude futures contract for May was up $2.10, or 8.1% at $28.01 a barrel at 0820 GMT.
U.S. crude futures for April also rose $2.03 to $27.25 a barrel. The front-month April contract, which spiked 24% on Thursday, expires later on Friday.
"An astonishing rebound in crude oil prices overnight was primarily driven by (the) U.S.'s consideration to intervene in the oil market by increasing strategic reserves, while slashing some oil production," said Margaret Yang, market analyst at CMC Markets.
"The underlying issue is that global energy demand is falling sharply as more countries join the 'lockdown' club. The severity of COVID-19 for the macro-economy could exceed anyone's expectation, and it could last for a long period of time."
Brent crude futures were up $1.90, or 6.7%, to $30.37 per barrel. They rose as high as $30.68 earlier in the session.
The international benchmark rose 14.4% on Thursday in its biggest one-day gain since September, but despite this was on track for its fourth consecutive weekly drop on Friday.
U.S. crude and Brent have both collapsed about 40% in the last two weeks since talks between the Organization of the Petroleum Exporting Countries and its allies, including Russia, broke down, which led Saudi Arabia to ramp up supply.
The Trump administration is considering a diplomatic push to get Saudi Arabia to close its taps and using the threat of sanctions on Russia to force them to reduce output, the Wall Street Journal reported.
"The outsized gains by WTI reflect the hope and not the reality of the U.S. shale industry. Russia and Saudi Arabia have zero interest in helping US shale survive. Just the opposite, in fact," said Jeffrey Halley, senior market analyst at OANDA.
"Once this reality finally sets in, I expect the rally in oil to disappear as quickly as it began."