US oil bounces, closing up 2.9 pct on March meeting report

Saudis pumping out oil like crazy: Pro
Will the oil production freeze materialize?

U.S. oil prices turned positive late in the session to close higher on Thursday on a report OPEC members and Russia had agreed to meet in March to discuss capping crude production at January levels.

U.S. West Texas Intermediate (WTI) crude futures settled 92 cents higher, or 2.86 percent, at $33.07 a barrel, after falling more than $1 earlier.

Brent crude futures were up 79 cents at $35.22 a barrel, also having lost more than $1 at the session low.

Venezuelan oil minister Eulogio Del Pino said his country, Saudi Arabia, Russia, and Qatar had settled on meeting in March, Bloomberg News reported.

Oil prices rose last week and early this week after the four countries floated the freeze, but the rally lost steam as market watchers began to doubt the efficacy of the plan. They turned decisively lower on Tuesday after Saudi oil minister Ali al-Naimi said outright production cuts would not happen.

Saudi Arabia's Oil Minister Ali al-Naimi.
Saudi oil minister Naimi: Oil production cuts won't happen

Futures had fallen as much as 3 percent, as data indicating new record highs in U.S. crude inventories added to worries about oversupply in a slowing global economy.

Stockpiles at the Cushing, Oklahoma hub for U.S. crude deliveries rose by more than 503,000 barrels to reach above 67.5 million barrels between Feb. 19 and Feb. 24, market intelligence provider Genscape reported, according to traders who saw the data.

U.S. government data on Wednesday showed that Cushing inventories rose 333,000 barrels last week to reach 65.1 million for a fourth straight week of record highs. Inventories for all of the United States are at all-time peaks above 507 million barrels.

Oil prices are down about 70 percent from highs above $100 a barrel in a 20-month long selloff that has met little resistance.

But after hitting 2003 lows between late January and early this month, oil prices had shown better recovery, leading some traders to bet the market had hit bottom. But declines resumed this week after Saudi Arabia ruled out production cuts and following data showing the new highs in U.S. crude inventories.

"We keep taking out intraday support levels," said David Thompson at Powerhouse, another energy-focused commodities broker in Washington. "This last rally that topped out on Feb. 23 has less technical strength than the previous rally which topped out on Jan. 2, so I suspect more bearishness in the short-term."

Igor Sechin, chief executive officer of OAO Rosneft, pauses during a session at the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia, on Friday, June 19, 2015.
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Economists at Citi cut their forecast for this year's global economic growth to 2.5 percent from a previous 2.7 percent, citing slowing growth concerns.

"Global growth prospects are worsening further, with deterioration across advanced economies alongside previous weakness in emerging markets," the note said.

Strong U.S. demand for gasoline helped limit Thursday's earlier losses, although analysts said this effect would ease.

U.S. gasoline demand stood at 9.06 million barrels per day (bpd) during the week ending Feb. 19, up from 8.6 million bpd in the week ending Jan. 22, the Energy Department said.

Weekly data from the U.S. Energy Information Administration on Wednesday showed crude inventories rose to a fresh record high above half a billion barrels, but the figures also suggested output has fallen to about 9.1 million barrels per day, the same level as in October 2015.

"We would argue that the numbers are starting to show more credible evidence that the low prices are really starting to bite," consultant JBC Energy said in a note.

— CNBC's Tom DiChristopher contributed to this story.