By Yuka Obayashi

TOKYO (Reuters) – Oil prices rose on Wednesday as investors looked for bargains after the previous session’s slump and on hopes that consuming countries will look to fill their strategic reserves, although oversupply fears and warnings of a deep recession capped gains.

Brent futures () were up 38 cents, or 1.3%, at $29.98 a barrel as of 0201 GMT, after falling 6.7% on Tuesday.

U.S. West Texas Intermediate crude () rose 36 cents, or 1.8%, at $20.47, having crashed 10.3% in the previous session.

Both benchmarks were undercut by worries that a record global output cut by producers would not offset plunging fuel demand due to efforts to contain the coronavirus pandemic.

“Investors unwound short positions, after confirming a rise in U.S. crude oil stocks,” said Kazuhiko Saito, chief analyst at Fujitomi.

Before the report on U.S. inventories, “they had sold aggressively with expectations for such a build,” Saito said.

U.S. crude oil, gasoline and distillate stocks all rose sharply last week, data from industry group the American Petroleum Institute showed on Tuesday.

Crude inventories rose by 13.1 million barrels in the week ended on April 10 to 486.9 million barrels, more than analyst expectations for a build of 11.7 million barrels.

Hopes for massive purchasing by consuming countries for their strategic stockpiles also lent support.

Officials and sources from the Organization of the Petroleum Exporting Countries and its Russia-led allies – a grouping known as OPEC+ – have indicated that the International Energy Agency (IEA), energy watchdog for the world’s most industrialised nations, may announce purchases of up to several million barrels to buoy the record OPEC+ output cut.

The U.S. Energy Department said on Tuesday it is negotiating with nine energy companies to store about 23 million barrels of domestic oil in its Strategic Petroleum Reserve (SPR).

Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said on Monday that oil purchases into countries SPRs would reach 200 million barrels over the next couple of months, citing the IEA.

Warnings of a deep recession by the International Monetary Fund (IMF), however, weighed on investor sentiment.

The global economy is expected to shrink by 3.0% during 2020 in a stunning coronavirus-driven collapse of activity that will mark the steepest downturn since the Great Depression of the 1930s, the IMF said on Tuesday.