Crude oil futures jumped 3 percent on Thursday, reversing earlier loses after confirmation of a meeting of major producers and news of project delays and job cuts in the industry.
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Venezuela reaffirmed a mid-March meeting of oil producers that would include Saudi Arabia, Russia and Qatar, to stabilize prices that have slumped 70 percent in a 20-month rout.
The four countries are involved in an effort to get oil producers in the Organization of the Petroleum Exporting Countries and elsewhere to freeze production at January's highs. Many traders believe an output cut and not freeze is what the market needs to clear the global crude glut.
"It's the Venezuela headline that got the market excited enough to rebound, though it's baffling why as everyone knows of this meeting and that it's not going to achieve anything," said John Kilduff, partner at Again Capital, a New York energy hedge fund.
U.S. crude futures settled up 92 cents, or 2.9 percent, at $33.07 a barrel. It had slid more than $1 at the session low.
Brent crude futures finished up 88 cents, or 2.6 percent, at $35.29 a barrel, hitting a three-week high. It had also dropped more than $1 earlier.
The rally in crude also boosted gasoline futures, which settled up nearly 5 percent after rallying from early in the day on strong demand for the motor fuel.
Aside from the March meeting, traders said sentiment in oil was helped by project deferments in the U.S. shale industry and job cuts that will slow production.
Continental Resources Inc, one of the biggest shale drillers in North Dakota, said it planned to continue deferring project completions in the Bakken fields due to low crude prices.
Oil services provider Halliburton said it will start a new round of global layoffs that will cut 5,000 jobs.
Oil prices had fallen as much 3 percent earlier on Thursday after data indicating new record highs in U.S. crude inventories.
Stockpiles at the Cushing, Oklahoma delivery point for U.S. crude futures rose by more than 503,000 barrels to reach above 67.5 million barrels between Feb. 19 and Feb. 24, traders said, quoting data by market intelligence provider Genscape.
Officially, the U.S. government reported on Wednesday that Cushing added 333,000 barrels last week to reach 65.1 million for a fourth straight week of record highs. Nationwide, inventories rose to all-time peaks above 507 million barrels.
(By Barani Krishnan; Additional reporting by Amanda Cooper in London; Editing by Marguerita Choy and Bernadette Baum)