A gain in the dollar, which rose to an eight month high against a basket of currencies .DXY , also weighed on prices as oil, priced in the US unit, became less affordable to holders of other currencies.
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Oil jumped after Turkey shot down a Russian warplane near the border with Syria, fanning concern that conflict in the region may intensify.
It was more than double the 1.2mln barrels that analysts had expected, and attentions will now turn to the figures due from the US Energy Department which are also anticipated to see a weekly build in the stockpile.
In a research note, MIDF Research said shale oil producers in the United States (US) are not expected to limit their production despite weakness in global crude oil prices which led to the dumping of supply in the market.
Oil prices hit two-week highs, with Brent futures LCOc1 rising 2.9 percent to settle at $46.12 a barrel and USA crude CLc1 gaining 2.7 percent to settle at $42.87. Brent North Sea crude for January rebounded 1.56 to 46.39 a barrel, compared with Monday’s closing level.
“US crude oil inventories are not increasing as much as before, so this is giving the market some bullish sentiment”, said Daniel Ang, an investment analyst with Phillip Futures in Singapore.
West Texas Intermediate (WTI) futures, the USA crude benchmark, fell 50 cents, or 1.16 per cent, to US$42.54 per barrel. “But not this year because most people are more concerned about the persistent imbalance in supply and demand”, said Gao Jian, a Shandong-based commodity analyst at SCI International.
Saudi Arabia said earlier this week that it is prepared to use all measures necessary to ensure a stable oil market.
The second estimate of third quarter gross domestic product rose to 2.1%, which in the opinion of most market commentators means a rate hike by the Federal Reserve is still a possibility in December.
Oil has slumped about 45 percent the past year amid speculation the global glut will persist as the Organization of Petroleum Exporting Countries continues to pump above its collective quota and Russian output rose to a post-Soviet high.
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OPEC in its latest monthly oil report said its crude production averaged 31.38 million barrels a day in October.
