Saudi Arabia’s Minister of Energy Prince Abdulaziz bin Salman Al-Saud and Russia’s Energy Minister Alexander Novak are seen at the beginning of an OPEC and NON-OPEC meeting in Vienna, Austria December 6, 2019.

Leonhard Foeger | Reuters

U.S. West Texas Intermediate crude surged as much as 12% in a sudden move toward the end of trading.

The spike followed a report from Bloomberg that the oil minister of Algeria said OPEC and its allies, known as OPEC+, would discuss a massive cut that could reach 10 million barrels per day at its virtual meeting on Thursday. WTI jumped as much as 12% before paring some of those gains to settle 6.18% higher at $25.09.

International benchmark Brent crude gained 3.04% to settle at $32.84 per barrel.

The United States Oil Fund (USO), which tracks the price of oil, was halted for trading temporarily amid the wild activity into the end of the session. The exchange-traded fund resumed trading shortly after the initial halt.

Oil markets are facing their greatest moment of uncertainty in decades, with the coronavirus outbreak leading to unprecedented demand loss. Investors are hoping for some clarity from Thursday’s meeting, which was delayed from Monday over persistent disagreements between OPEC de facto leader Saudi Arabia, and OPEC ally Russia.

“The coming extraordinary producing-countries meeting is the only hope in the horizon for the market that could prevent a total price collapse and production shut-ins,” said Rystad Energy’s head of oil markets Bjornar Tonhaugen. “At the moment, prices are so volatile that any news or leaks about the direction of the negotiations could move them [prices] either way. As you have seen in recent days, price swings from gains to losses and back are not unusual in such times,” he added.

The meeting will focus on whether countries can agree to communally cut crude production in order to salvage plunging prices at a time when no one is buying oil and the world is running out of places to store it.

At OPEC’s last meeting at the beginning of March, Russia rejected the proposal of additional supply cuts. But on Wednesday the nation reportedly indicated that it’s ready to cut production by 1.6 million barrels per day, according to Reuters citing an energy ministry official.

Thursday’s meeting comes as oil prices have shed more than 50% this year as demand continues to fall off a cliff. The decline has pressured highly-leveraged U.S. oil companies, which are struggling to break even as crude trades lower for longer.

The OPEC+ meeting will be held via video conference as a precautionary measure amid the coronavirus pandemic, which has obliterated global oil demand and all but shut down the world’s major economies.

“OPEC+ is trying mightily to cobble together a sizable production cut, and they are in full spin mode to try and rally prices,” Again Capital’s John Kilduff told CNBC. “Tomorrow’s teleconference will be a make-or-break moment for the oil market. The math on a 10 million barrel per day cutback, which is the minimum necessary to stabilize the situation, is almost impossible to compute. I expect a bad day for OPEC+ tomorrow,” he added.

If Saudi Arabia and Russia are to cut their output — as President Donald Trump has called on them to — they want to see other non-OPEC+ nations, including the U.S., participate.

Also on Wednesday, the U.S. Energy Information Administration said that for the week ending April 3 U.S. inventory increased by 15.2 million barrels for the week ending April 3. Analysts had been expecting a build of 9.67 million barrels, according to estimates from FactSet.

– CNBC’s Natasha Turak contributed reporting.

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