Oil snags first 3-day win streak of 2016 at settle

U.S. oil futures settled up 92 cents, or 2.85 percent at $33.22 per barrel Thursday, marking the first three-day win streak of 2016.

Brent crude was up 1.14 cents at $34.24 a barrel by 3.11 p.m. ET, after after trading as high as $35.84.

U.S. crude last traded 1.24 cents higher at $33.55 a barrel, down from an intraday peak of $34.82.

Oil settled up 85 cents on Wednesday and up $1.11 on Tuesday, breaking a run of negative settles amid supply concerns.

Oil prices were nearly 3 percent higher on Thursday after the Russian energy minister said Saudi Arabia had proposed that oil-producing countries trim output, which would be the first global deal in over a decade to help clear a glut that has depressed prices for over a year and a half.

Prices pared gains amid growing doubts over the deal to cut production by up to 5 percent after media reports said that delegates from the Organization of the Petroleum Exporting Countries had not yet heard of any plans for talks and that Saudi Arabia had not proposed cuts.

Crude had jumped as much as 8 percent after Russian Energy Minister Alexander Novak revealed the proposed reductions in output, which would amount to about 500,000 barrels a day of cuts by Russia, one of the largest producers outside OPEC.

A Saudi official later told the Wall Street Journal the proposal did not in fact come from Saudi Arabia, but Riyadh and its Persian Gulf allies "are ready to cooperate with others" to bring stability to international oil markets.

The Russian minister also said that it was reasonable to discuss the situation in the oil market and that OPEC was trying to organize a meeting with other producers next month.

Anticipation that OPEC and non-OPEC producers could coordinate production cuts has been rising all week, and a closing gain on Thursday would be the third in a row — a first this year.

But analysts and market watchers have been skeptical, saying it was unlikely a deal would be struck, particularly as Iran, which has boosted oil exports after the lifting of sanctions, seeks to recover its market share.

"The rally this morning isn't going to last," said Bill Baruch, senior market strategist at iitrader.com in Chicago.

"It's a buy-the-rumor, sell-the-fact affair until we see something substantial"

Short covering, which has been a major factor in oil's recovery from last week's lows, also pushed prices up. Speculators have raced to unwind some of the record-large bearish positions racked up over the last six months.

"I haven't seen any official comments from the Saudi Arabians yet, so I think the latest push is just another wave of covering by the spec shorts," said Gene McGillian, Senior Analyst at Tradition Energy in Stamford Connecticut.

Still, in the absence of a deal, some said the oil market could recover of its own accord, particularly as U.S. shale producers show signs of capitulation.

The number of active rigs has been coming down and production is falling in the region. Oilfield services provider Baker Hughes Inc, said it expected the number of rigs active globally to decline by as much as 30 percent in 2016.

—CNBC's Tom DiChristopher and Jacob Pramuk contributed to this report.