Futures in New York added as much as 5.8%, before paring some of those gains. Saudi Aramco cut sales to the U.S. and Europe by about half and reduced supplies to at least 12 customers in Asia for June as OPEC and its allies embark on record output curbs. The International Energy Agency said the outlook for global oil markets has improved as demand firms, while oil major BP Plc said consumption has surged back this week.

In a sign that output cuts are starting to take hold, key gauges of market strength are rallying. The price difference between Brent’s two nearest contracts have reached their narrowest in almost two months, signaling the oversupply is reducing. Dated Brent, which prices more than two-thirds of the world’s oil, was assessed by S&P Global Platts at $28 a barrel on Wednesday, up almost $10 from a month ago.

Oil has swung between gains and losses this week as the market grapples with a nascent recovery in demand and concerns a resurgence of coronavirus cases could derail an economic rebound. While the IEA joined Saudi Arabia and Russia in seeing signs of consumption improving, the market is still having to recover from an unprecedented rout that has seen about a billion barrels worth of storage build up.

“After ‘Black April’, the heaviest demand destruction may be behind us, but huge uncertainties remain,” IEA Executive Director Fatih Birol tweeted. “We see early signs markets have begun the rebalancing process.”

Aramco will decrease shipments to some buyers in the U.S. and Europe by as much as 70%, according to a person familiar with the situation. Eight of the 12 Asian refiners that had their term supplies cut said the reductions were substantial, with curtailments of 20-30% or more.

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OPEC on Wednesday also presented a bleak assessment of global oil for the second quarter, even as pockets of demand emerge in China and India, and Goldman Sachs Group Inc. sees rising gasoline consumption.

“The global oil market is clearly on a road to recovery and re-balancing,” said Bjarne Schieldrop, chief commodities strategist at SEB AB. “Supply in non-OPEC+ is declining rapidly, OPEC+ is cutting deep and yet deeper and demand is rapidly recovering as China revives.”