Traders searched for logic in a market that seemed to defy it, and by Friday had largely given up.
"I don't understand it," analyst and trader Stephen Schork said. "I don't know why people love buying crude right now. The economy's in horrendous shape. Nobody's driving."
Light, sweet crude for March delivery soared more than 6 percent Friday, or $2.80, to settle at $46.47 a barrel on the New York Mercantile Exchange. In the volatile hours between market open and close, prices swung as low as $41.40 and as high as $47.
The world's largest oil services company reported Friday that fourth-quarter profits tumbled nearly 17 percent. Its shares soared more than 10 percent after a gloomy conference call with Schlumberger Chairman and Chief Executive Andrew Gould, who said industry cycles are "getting much sharper in their amplitude and shorter in their duration."
Schlumberger Ltd. announced it would cut as many as 5,000 jobs globally, and warned that the same supply issues that helped send prices for a barrel of oil close to $150 over the summer are still in place.
"The recent years of increased exploration and production spending have not been sufficient to substantially improve the supply situation," he said. "The age of the production base, accelerating decline rates and the smaller size of recently developed fields will mean that any prolonged reduction in investment will sow the seeds of a strong rebound."
Investors appeared to believe him, sending shares up $3.82 to close at $41.09.
There were signs that in the current economic environment, commodities like oil and the companies that help produce it are still be a safe haven.
Phil Flynn, an analyst at Alaron Trading Corp., said that after historic swings in price — from $147 a barrel to near $33 a barrel this week — traders have struggled to agree on what's driving the market.
Crude prices are "being torn in a lot of directions right now," Flynn said.
Some investors have turned away from oil, believing it will take months to work out a glut in excess crude, Flynn said. At the same time, others are more worried about inflation and have turned to gold and other commodities like oil, Flynn said.
"There are a lot of different camps," he said. "I'm in the camp that the oil is going lower. I have a hard time believing that the economy's going to go fast enough that it will eat all this extra supply."
A new forecast by tanker-tracker PetroLogistics pins January OPEC output at 26.15 million barrels a day, said Addison Armstrong, director of market research at Tradition Energy.
While that would be 5.4 percent lower than the firm's December figures, OPEC will likely fall well below its target of 24.8 million barrels a day in production, Armstrong said.
Every week, government reports show how badly demand for energy has deteriorated.
U.S. crude inventories have risen by 14 million barrels in just the last three weeks, according to the Department of Energy's Energy Information Administration.
It's possible that the market is bottoming out, Schork said. The prices are so low that speculators may have jumped back in force, snatching oil contracts in expectation that prices will ultimately rise. Traders also could be responding to rumors that there's more room to store excess crude than previously thought at the Nymex hub in Cushing, Okla.
"But those are only guesses," he said. "There's nothing anyone can spin to justify this, yet I cannot deny what I'm seeing on the screen."
Gas prices leveled off Friday after climbing since the beginning of the year. Prices at the pump were unchanged at $1.85 a gallon nationwide, according to auto club AAA, Wright Express and the Oil Price Information Service. Prices are nearly a quarter a gallon higher than what they were since bottoming on Dec. 31, but still $1.16 a gallon below a year ago.
In other Nymex trading, gasoline futures rose 6.1 cents to settle at $1.1544 per gallon. Heating oil rose 10.19 cents to settle at $1.4505 per gallon. Natural gas for February delivery fell 16.3 cents to settle at $4.681 per 1,000 cubic feet.
In London, the March Brent contract rose $2.98 to settle at $48.37 on the ICE Futures exchange.