Oil prices closed more than 2 percent higher on Thursday on short-covering and after a modest stockpile drop at the delivery hub for U.S. crude futures.
The benchmark rose out of technical bear market, after sinking more than 20 percent from its June high in recent days as overproduction and large stockpiles of crude and refined products around the world weighed on markets.
Oil prices had seesawed throughout the morning, but moved decisively higher at midday, bouncing off technical levels as crude broke above its 200-day moving average, Again Capital founding partner John Kilduff told CNBC.
U.S. West Texas Intermediate (WTI) crude futures settled 2.69 percent higher, or $1.10, at $41.93 a barrel.
International Brent crude futures were trading at $44.25 a barrel, up $1.15. or 2.67 percent.
"With WTI testing $40 lately and without follow through selling, short positions are likely booking profits and we could see range bound prices after this," said Chris Jarvis, analyst at Caprock Risk Management in Frederick, Maryland.