Oil edged higher on Thursday following sharp losses in the previous session on hopes that a big build-up in U.S. inventories may mean producers have little option but to deepen output cuts as the coronavirus pandemic ravages demand.

With official data showing U.S. inventories surging the most on record, WTI fell on Wednesday to its lowest since February 2002, with Brent slumping more than 6%.

Brent crude was up 36 cents, or 1.3%, at $28.05 a barrel by 05:02 GMT. U.S. West Texas Intermediate (WTI) was up 10 cents, or 0.5%, at $19.97.

Concerns about crumbling demand kept a lid on gains with both contracts having traded over 2.5% higher earlier in the session.

Energy Information Administration data also showed large U.S. refined fuels stock builds despite refiners operating at 69% of capacity nationwide, the lowest since September 2008.

Source : Reuters