Oil prices are bouncing despite warnings that global energy demand in 2020 is set to slump 7 times more than during the financial crisis

Oil prices are rising once again on Thursday, shrugging off comments by the International Eenergy Agency that energy demand is set to fall the most on record this year amid coronavirus, as lower than expected demand for storage boosted prices for the commodity.

The International Energy Agency said on Thursday in a statement: "Energy demand will fall 6% in 2020 — seven times the decline after the 2008 global financial crisis."

Dr Fatih Birol, executive director of the IEA said: "It is still too early to determine the longer-term impacts, but the energy industry that emerges from this crisis will be significantly different from the one that came before."

But oil prices were unbothered and rose despite the IEA's gloomy forecast.

West Texas Intermediate prices are up 14% at $17.46 barrel, as of 7.05 a.m ET, meanwhile the Brent, the international benchmark is up 11% at $25.15 a barrel, according to Markets Insider data.

Neil Wilson, market analyst at Markets.com, said: "Oil continues to notch gains as the risk rally reflects hopes of the global economy opening up sooner, and after a smaller-than-feared build in US crude inventories. Front-month WTI rose above $17 in early European trade."

Oil prices have experienced swings of both downward and upward volatility over the last month. US oil prices turned negative for the first time in history last week, while Brent dropped to a more than two-decade low.

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But oil has risen this week after the American Petroleum Institute reportedly said that US oil inventories rose by just shy of 10 million barrels last week, marking a fall from the 12 million barrel increase expected by analysts, the Financial Times reported.

Analysts at MUFG said in a research note Thursday oil is entering the "inflection stage in the cycle".

"We expect the market to sternly test global storage capacity in the coming 2-3 weeks which will likely lead to significant volatility with more spikes to the downside to front-month oil prices."

"This will continue until we reach the equilibrium of supply equating demand, given storage and filling capacity constraints – as with nowhere to store the oil, supply has no other option but to be shut-in in-line with the expected demand losses."

But MUFG predicts at this this inflection point that demand-supply fundamentals will balance and oil prices will bottom out.

On Thursday, oil giant Shell slashed its dividend for the first time since the World War Two, reflecting the turbulent state of the industry.

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