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Oil Futures Recover After Recent Losses, Settle Nearly 20% Up

Crude oil prices ended sharply higher on Wednesday, rebounding from recent big setbacks that resulted in the front month contract plunging to sub-zero levels for the first ever time in history.

Oil prices fell early on in the session, reacting to the American Petroleum Institute's report late Tuesday that oil inventory in the U.S. increased by 13.2 million barrels in the week ended April 17th.

Data showing a Short-covering following recent huge losses, and a tweet from U.S. President Donald Trump that he has instructed the U.S. navy to destroy Iranian gunboats that harass U.S. vessels at sea, contributed to oil's surge.

West Texas Intermediate Crude oil futures for June ended up $2.21, or about 19.1%, at $13.78 a barrel, after having dropped to a low of $10.26 earlier in the session. Prices rose to a high of $16.20 in mid-morning trades before paring some gains.

Brent crude futures moved up $1.04, or about 5.4%, to $20.37 a barrel.

Oil producers are reportedly considering further steps to reduce output. Saudi Arabia has said it is ready to take extra measures with other producers. However, the next formal meeting of OPEC and its allies is scheduled to take place only in June.

U.S. Energy Information Administration (EIA) reported that crude stockpiles in the country rose by 15 million barrels last week, almost in line with expectations. The EIA also said that inventories at the Cushing hub rose by another 4.8 million barrels.

Gasoline inventories were up by about 1 million barrels last week, much less than the expected increase of about 3.6 million barrels. Distillate stockpiles increased by 7.9 million barrels, more than three times the expected rise.

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