LONDON: Oil bounced back on Wednesday recovering from overnight losses by more than 1 percent with Brent climbing above $71 a barrel.
The market has swung between sharp gains and losses since OPEC said last week that it would maintain steady output in an oversupplied market. Brent and U.S. crude are down more than 30 percent since June and touched five-year lows on Monday.
Brent hit a high of $71.46 a barrel before trading up 62 cents at $71.16 by 0350 GMT, after falling $2 on Tuesday.
US crude was at $67.68 a barrel, off the day’s high of $67.97 but up 80 cents from the previous session when prices dropped more than $2.
American Petroleum Institute data showing a bigger-than-expected fall in crude stocks supported U.S. oil prices.
OPEC’s oil supply fell by 340,000 barrels per day (bpd) in November as a recovery in Libya faltered, a Reuters survey found, although a lack of deliberate cutbacks by Saudi Arabia and other key members underlines their focus on defending market share.
The Kingdom would only consider cutting production if other countries, including non-OPEC producer Russia, joined in limits, former Saudi intelligence chief Prince Turki bin Faisal said.
Chart analysts, however, warned that the months-long rout is not over yet and U.S. crude may quickly plunge towards $50 per barrel if a handful of tenuous support levels give way after a period of consolidation.
In the United States, crude inventories fell by 6.5 million barrels in the week to Nov. 28 to 373 million, according to API, versus analyst expectations for an increase of 1.3 million barrels.
Data from the U.S. Energy Information Administration is due on Wednesday at 10:30 a.m. EST (1530 GMT).