SYDNEY (Bloomberg) - Oil clawed back some of its biggest drop in a generation as investors grappled with the most volatile market on record in the midst of simultaneous supply and demand shocks.

Futures rose about 4% in early Asian trading on Tuesday after collapsing by a quarter on Monday -- the biggest price drop since the 1991 Gulf War. A gauge of volatility in New York futures jumped to the highest level since at least 2007.

Saudi Arabia slashed its official crude pricing and is threatening record output while Russia’s largest producer said it will ramp up production next month. This is happening at a time when demand is being drastically eroded by the virus impact, with the International Energy Agency now expecting global oil consumption to contract by 90,000 barrels a day this year.

Russian Energy Minister Alexander Novak indicated Moscow was prepared for a war of attrition, saying his country’s oil industry had “enough financial resilience to remain competitive at any forecast price level, and to keep its market share.” Meanwhile the IEA’s Executive Director Fatih Birol warned that “playing Russian roulette in oil markets may well have grave consequences.”

The oil crash sent shockwaves across markets, with U.S. stocks going through one of the biggest sell-offs since the financial crisis, Treasury yields plummeting, and credit markets buckling. Stocks of energy producers were dragged down, with Exxon Mobil Corp. dropping the most in 11 years and Occidental Petroleum Corp. and Chevron Corp. suffering double-digit losses.

The Energy Information Administration said it would delay the release of its monthly Short-Term Energy Outlook to allow time to “incorporate recent global oil market events.”

West Texas Intermediate crude for April delivery rose as much as $1.83, or 5.9%, to $32.96 a barrel on the New York Mercantile Exchange and was at $32.55 at 8:02 a.m. in Singapore. It crashed by more than $10 a barrel on Monday to end at $31.13 a barrel.

Brent for May settlement was up 4.1% at $35.75 a barrel. It earlier rose as much as 6.6% after falling 24% Monday to end the session at $34.36 on the London-based ICE Futures Europe exchange.

The shocks in supply and demand have also reverberated across time-spreads, options and volatility. Brent’s three-month price structure widened sharply as oil for prompt delivery collapsed against later shipments.

It moved deeper into contango, a sign of bearishness and oversupply, making it profitable for physical traders to buy crude and put it into storage, either in onshore tank farms or at sea on tankers.