Oil Jumps after Russia Dangles Prospect of OPEC Cooperation

Brent crude LCOc1 rose $1.30, or 4.1%, to settle at $33.10 a barrel, after touching a session high of $33.49.

Oil futures surged on Wednesday, after Russia said it was discussing the possibility of co-operation with OPEC, fanning hopes that a deal was in the works to reduce oversupply that sent prices the lowest levels in a dozen years last week, Reuters reported.

A statement from Russia's energy ministry left the door open to talks with OPEC, moments after the head of Russia's pipeline monopoly said officials have decided they should talk to Saudi Arabia and other OPEC members about output cuts, according to the report.

The top non-OPEC producer, Russia has in the past been unwilling to cut oil output, as it battles for market share with OPEC output leader Saudi Arabia.

Hints of a possible deal between OPEC members and rival producers had already helped oil rally 4% on Tuesday.

Brent crude LCOc1 rose $1.30, or 4.1%, to settle at $33.10 a barrel, after touching a session high of $33.49.

U.S. crude CLc1 settled up 85 cents at $32.30 per barrel, a 2.7% gain, having topped out at $32.84.

The U.S. Energy Information Administration said inventories of distillates, fell more than 4 million barrels, trumping expectations for a rise of about 2 million, according to Reuters.

The data also showed U.S. crude oil stocks hit their highest on record in the week to Jan. 22, due largely to increases on the U.S. Gulf Coast, a major oil hub, according to the report.