* Trump vows 'major' steps to aid U.S. economy
* U.S. producers slash spending, which could reduce output
* Saudi to boost April supply to 12.3 mln bpd -Aramco CEO
* Russia does not rule out joint measures with OPEC
* China's President Xi visits Wuhan as new virus cases
tumble
* U.S. crude stockpiles rise last week -API
(Updates with API data on U.S. crude stocks)
By Scott DiSavino
NEW YORK, March 10 (Reuters) - Oil prices jumped over 8% on
Tuesday, bouncing from the biggest rout in nearly 30 years a day
earlier, as the possibility of economic stimulus encouraged
buying and U.S. producers slashed spending in a move that could
cut output.
On Monday, U.S. President Donald Trump pledged "major" steps
to gird the U.S. economy against the impact of the spreading
coronavirus outbreak. Japan's government said it planned to
spend more than $4 billion in a second package of steps to cope
with the virus. U.S. shale producers, including Occidental Petroleum Corp
OXY.N , deepened spending cuts that could reduce production.
"There was almost an immediate response from U.S. producers
to cut spending that will likely result in diminished U.S. oil
output in the months ahead," said John Kilduff, partner at Again
Capital LLC in New York, noting "The rapidity of that response
helped buoy the market after Monday's collapse."
Oil plunged about 25% on Monday. It rebounded on Tuesday
along with equities and other financial markets. MKTS/GLOB .
Brent futures LCOc1 rose $2.86, or 8.3%, to settle at
$37.22 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1
rose $3.23, or 10.4%, to settle at $34.36.
"The oil price went up today because it went insanely down
yesterday, and some bargain hunters are driving things up," said
Bjoernar Tonhaugen, head of oil markets at energy consultant
Rystad, noting "It will go down further with some days going up
in between."
Both benchmarks plunged on Monday to their lowest since
February 2016, their biggest one-day percentage declines since
Jan. 17, 1991, at the outset of the first Gulf War.
Trading volumes in the front-month for both contracts were
well below the record highs seen on Monday, when volumes soared
after Saudi Arabia, Russia and other major oil producers ended
three years of cooperation to limit supply and started a price
war for market share.
Saudi, the world's biggest oil exporter, escalated tensions
with plans to supply 12.3 million barrels per day (bpd) in
April, well above current production levels of 9.7 million bpd,
according to Saudi Aramco 2222.SE CEO Amin Nasser.
"Oil prices have managed to hold on to some gains despite
Saudi Arabia's announcement to open the floodgates in April,"
Rystad's Tonhaugen said, noting "Saudi Arabia is not bluffing
and the market will feel it next month."
With oil erasing over a third of its value this week, OPEC
members were bleeding over $500 million a day in lost revenue,
according to Reuters calculations. Russian oil minister Alexander Novak said he did not rule
out joint measures with OPEC to stabilize the market, adding
that the next OPEC+ meeting was planned for May-June.
Saudi Arabia's energy minister, however, told Reuters he did
not see a need to hold an OPEC+ meeting in May-June if there was
no agreement on measures to deal with the impact of the
coronavirus on oil demand and prices. "I fail to see the wisdom for holding meetings in May-June
that would only demonstrate our failure in attending to what we
should have done in a crisis like this and taking the necessary
measures," Prince Abdulaziz bin Salman said.
"Price wars and pandemics are nothing new to the commodity
markets, but both occurring simultaneously is something we have
yet to witness in our careers," RBC analysts said in a note.
Sentiment was also lifted after Chinese President Xi Jinping
made his first visit to Wuhan since the coronavirus outbreak
forced an unprecedented lockdown of the city of 11 million
people, a sign that efforts to control the virus are working.
Crude prices drew some support from this, although analysts
expect global oil demand will continue to slump during the
outbreak, which has spread beyond China and prompted Italy to
implement a nationwide lockdown.
U.S. crude oil inventories rose 6.4 million barrels last
week to 453 million barrels, data from industry group the
American Petroleum Institute showed on Tuesday. Analysts had
expected a build of 2.3 million barrels. Official U.S.
government data is due on Wednesday. EIA/S
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Oil prices bounce back from epic trouncing on stimulus hopes
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