Crude oil storage tanks are seen from above at the Cushing oil hub, appearing to run out of space to contain a historic supply glut that has hammered prices, in Cushing, Oklahoma, March 24, 2016.
Crude oil storage tanks are seen from above at the Cushing oil hub, appearing to run out of space to contain a historic supply glut that has hammered prices, in Cushing, Oklahoma, March 24, 2016. Reuters / Nick Oxford

Crude oil futures rose nearly 3% on Wednesday as investors piled back in after the heavy rout in the previous session, shifting their focus again to supply concerns even as worries about a recession mounted.

Brent crude futures rose $2.82, or 2.7%, to $105.59 a barrel by 1222 GMT, after plunging 9.5% on Tuesday, the biggest daily drop since March.

U.S. West Texas Intermediate crude climbed $2.46, or 2.4%, to $101.95 a barrel, after closing below $100 for the first time since late April.

"Today is sort of a reset. No doubt there is short covering and bargain hunters are coming in," said John Kilduff, partner at Again Capital LLC.

"The fundamental story regarding global tightness is still there ... The sell-off was definitely overdone," he added.

OPEC Secretary General Mohammad Barkindo said on Tuesday that the industry was "under siege" due to years of under-investment, adding shortages could be eased if extra supplies from Iran and Venezuela were allowed.

Russia's former president Dmitry Medvedev also warned that a reported proposal from Japan to cap the price of Russian oil at around half its current level would lead to significantly less oil in the market and push prices above $300-$400 a barrel.

On the other hand, the Norwegian government on Tuesday intervened to end a strike in the petroleum sector that had cut oil and gas output, a union leader and the labour ministry said, ending a stalemate that could have worsened Europe's energy crunch.

By Saturday, the strike would have cut daily gas exports by 1,117,000 barrels of oil equivalent (boe), or 56% of daily gas exports, while 341,000 of barrels of oil would have been lost, the Norwegian Oil and Gas (NOG) employers' lobby said.

Worries about a recession, however, have weighed on markets. By some early estimates, the world's largest economy may have shrunk in the three months from April through June. That would be the second straight quarter of contraction, considered the definition of a technical recession.

More G10 central banks raised interest rates in June than in any month for at least two decades, Reuters calculations showed. With inflation at multi-decade highs, the pace of policy-tightening is not expected to let up in the second half of 2022.