Oil prices went through their sharpest rise in six and a half years today, as the commodity benefited from recovering equity markets and reduced fears over China's economic slowdown.
US crude finished the day 10.3 per cent higher at $42.56 per barrel, resulting in its biggest one-day increase since March 2009, when it rose by 11.1 per cent.
Front-month Brent, the global benchmark, was also up 10 per cent at $47 per barrel – $4 higher than yesterday.
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The surge brought an end to a long streak of declines for the commodity, which has approximately halved in value over the last 12 months due to over-supply.
Today's performance also marks a dramatic reversal from earlier this week, when it fell below $38 per barrel in value – its lowest point since the financial crisis.
The sell-off resulted from Monday's 8.5 per cent drop on the Shanghai Composite Index. China is the world's second biggest oil consumer, so a significant economic slowdown would reduce demand and make the global oversupply even heavier.
Today's swift recovery was driven by a revival of confidence among investors, whose fears that China's economic slowdown would have knock-on effects were assuaged by the country's commitment to stabilising its economy.
On Tuesday, China's central bank announced it was cutting its key lending rate by 0.25 percentage points to 4.6 per cent in an effort to calm stocks.
This, combined with Fed policymaker William Dudley's strong indication yesterday that a US interest rise will not go ahead next month, has sent European and US markets surging.
News that Venezuela called for an emergency meeting of the Organization of the Petroleum Exporting Countries (Opec) also helped boost oil. The intransigence of some of the organisation's key members on the matter of reducing production was one of the main instigators for oil's long-term downfall that began last year.
Algeria and Iran have also expressed a desire to discuss the possibility of crisis talks between the Opec countries.