Oil prices jumped on Wednesday as U.S. data showed falling crude inventories, stemming deep losses brought on by a supply glut and signals from OPEC producers and Russia that they will not cut production.
WTI crude closed 54 cents higher at $56.47 per barrel after surging to a session high of $58.98. It touched its lowest level since May 2009 at $53.60 on Tuesday.
Front-month Brent was last up $1 to $61 a barrel shortly on Wednesday. It traded as high as $63.40 earlier in the afternoon. The January Brent contract, which expired in the prior session, hit a low of $58.50 on Tuesday, its weakest since May 2009.
U.S. Energy Information Administration data showing U.S. crude inventories falling by 847,000 barrels helped curtail losses, despite expectations of a 2.4-million-barrel draw. Analysts said the boost would not last long.
"The decline in overall crude oil inventories was smallish," said John Kilduff, partner at Again Capital LLC in New York. But analysts said any draw helped support the market after Tuesday data from the American Petroleum Institute showed a big build in U.S. crude inventories.
"I think we're just seeing a lot of short covering going into the end of the year," Keybanc Capital Markets analyst David Deckelbaum said.