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 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.
Prices remain close to 5-1/2-year lows, and have almost halved over the last six months as increasing volumes of light, high-quality crude from North American shale have overwhelmed demand.
Core Gulf OPEC members have said they are prepared to wait as long as a year for the market to stabilize, undercutting hopes they will step in to stem crude price losses.
"Every day now you have some Gulf OPEC member actively trying to talk the market down," said Olivier Jakob, oil analyst at Petromatrix. "OPEC is trying to choke U.S. oil producers."
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Earlier in the day, Iraqi Kurdistan government officials said Iraqi crude oil exports to the Turkish port of Ceyhan could reach 800,000 bpd next year, higher than previously announced. Oil shipments from Angola, Africa's second-largest exporter, are also set to increase in February to 1.86 million barrels per day, the highest since 2012.
Russian Energy Minister Alexander Novak has said Moscow will not cut output in 2015, even if pressure on its finances rises with the economy showing signs of severe stress as the ruble collapses.
The crisis in Russia has sparked further concerns about energy demand growth.