Oil prices bounced this evening after US petrol demand over the past four weeks offset a rise in crude oil stockpiles.
Demand for petrol soared by over five per cent compared to a year ago, while stockpiles of oil in the US rose by 3.5m barrels in the week, hitting an all-time high of over 507m barrels.
International benchmark Brent crude hit $34.10 a barrel in evening trade, while US crude rose to $31.94.
At the US Gulf Coast refining hub stockpiles hit highs not seen since 1990, though gasoline stockpiles fell for the first time since November last year as low margins forced refineries to scale back production.
The oil price was sent sharply lower on Tuesday after Saudi oil minister Ali al-Naimi dashed investor hopes of a production cut, dismissing rumours that had emerged after the de facto Opec leader brokered a deal between Russia and some Opec members to freeze production at January levels.
Saudi is attempting to bring together more Opec and non-Opec oil producers who are in support of a production freeze at a meeting in March.
The deal was however called “laughable” and “ridiculous” by the Iranian oil minister after the country refused to take part. Iraq, one of the only other oil exporters that is planning to increase its production in coming months, has also refused to take part in the freeze.
“Instead of hearing the sound of the market adjusting to lower prices, Opec and Russia may hear nothing more than the sound of silence,” Barclays said in a note to clients.
The last time Saudi attempted to implement a deal between Russia and Opec in the 1980s it collapsed after countries refused to abide by the terms.
The oil price has crashed from highs of over $100 a barrel in mid-2014.