Brent crude prices were down 46 cents at $56.12 a barrel by 12:43 p.m. EST (1743). An earlier rise took prices as high as $57.42 a barrel, the strongest since Feb. 24.
Crude inventories in the US dropped by 5.8 million barrels last week to around 484.5 million barrels, data from the American Petroleum Institute showed late on Tuesday.
US crude oil stockpiles likely fell for a fifth straight week, while refined products inventories were seen up last week, a preliminary Reuters poll showed on Monday.
Brent crude rose 28 cents to $54.58 a barrel by 11:35 a.m. EST (1635 GMT) after touching $54.90, a fresh high not seen since before the first COVID-19 lockdowns in the West.
Two sources from OPEC+ producers said Saudi Arabia would cut output by more than 400,000 barrels per day (bpd) in the next two months on top of its existing cuts.
The market declined despite expectations the Organization of the Petroleum Exporting Countries and allies will hold off on increasing output in February.
Brent futures dropped 73 cents, or 1.4%, to $51.07 a barrel
On the last trading day of 2020, Brent rose 17 cents to settle at $51.80 a barrel. U.S. West Texas Intermediate rose 12 cents to settle at $48.52 a barrel. Brent fell 21.5% for the year, with WTI falling 20.5%.