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Oil spikes 9% as market rebound puts negative prices in rear view

FILE PHOTO: An oil storage tank and crude oil pipeline equipment is seen during a tour by the Department of Energy at the Strategic Petroleum Reserve in Freeport, Texas, U.S. June 9, 2016.  REUTERS/Richard Carson
  • West Texas Intermediate crude oil tore higher for a second straight session, jumping as much as 9% to $17.95 per barrel on Friday.
  • Brent crude, oil's international benchmark, traded as much as 6.4% higher to $22.70 per barrel.
  • The rally marks a sharp reversal from lows seen earlier in the week, when Tuesday expiration for May delivery contracts drove WTI to negative prices for the first time in history.
  • While some analysts are cheering the rebound, others see the move as a "dead-cat bounce" before another downturn. 
  • Watch oil trade live here.

West Texas Intermediate crude oil surged as much as 9% on Friday as investors turned back to the thrashed commodity market.
Contracts for June delivery traded as high as $17.95 per barrel before paring some gains later in the day. The jump follows a similar move on Thursday, marking a brief rally to close a volatile week.
Brent crude, oil's international benchmark, traded as much as 6.4% higher to $22.70 per barrel.
The world's most-traded commodity is hot off historic negative prices posted at the start of the week. May contracts closed at -$37.63 on Monday before expiring the following day, a first for oil as the coronavirus pandemic pushes demand to the floor. Traders were forced to pay others to take contracts off their hands as storage options dried up and delivery deadlines loomed.
Brent crude traded at a two-decade low amid the market turmoil.
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Oil prices turned higher on Wednesday, bolstered by President Donald Trump's tweet warning the US will "shoot down and destroy" Iranian ships threatening American vessels. The message was "perhaps the oldest Middle East oil trick in the book," Rabobank analysts said in a note, adding such language typically lifts oil prices.
Not all experts are convinced the market rally is sustainable. Oil's end-of-week leap is merely "a dead-cat bounce" before markets turn lower once more, Naeem Aslam, chief markets analyst at Avatrade, said.
"Speaking from a fundamental perspective, nothing has changed in terms of supply and demand, and it will be a surprise if we do not see the price falling again next week," he added.
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