Oil prices fluctuated during Wednesday trading as a report of lower U.S. crude inventories boosted prices and a higher dollar made the commodity more expensive for foreign traders. 

Immediately following the report from the U.S. Energy Information Administration, West Texas Intermediate crude rose by approximately 0.52% to $48.28, while benchmark Brent crude oil was up 0.65%, trading at around $49.44 at 10:30 a.m. ET.

However, prices moved lower just 30 minutes later. WTI was down 0.23%, at $47.92. Brent fell by 0.37% to $48.94.

The EIA said Wednesday that crude inventories fell by 1.3 million barrels for the week ending Nov. 18. 

That still leaves inventory at 489 million barrels, "at the upper limit of the average range for this time of the year," the EIA said in a statement.

Crude oil imports declined to 7.6 million barrels per day last week, and over the last four weeks, imports average 8.1 million barrels per day, which represents a 13.3% increase from the same period last year.

Refineries operated at 90.8% of their operable capacity last week, the EIA reported.

Gasoline inventories rose by 2.3 million barrels last week, and are "well above" the upper limit of the average range. Gasoline production decreased, averaging approximately 9.7 million barrels per day.

Following the report, U.S. integrated oil majors such as ConocoPhillips (COP) - Get Report and BP (BP) - Get Report were both gaining slightly during the trading session. 

The ICE U.S. Dollar Index (DXY), which is a measure of the dollar relative to six foreign currencies, rose by 0.6% Wednesday to its highest in a decade. A stronger dollar makes dollar-denominated commodities, like oil, more expensive for foreign traders.

Crude prices were further bolstered by comments from Organization of Petroleum Exporting Countries' (OPEC) member Iraq.

Iraq Prime Minister Haider al-Abadi said the country is willing to cut its crude oil output as part of the cartel's plans to reduce global crude supply and boost prices, according to Reuters. The Prime Minister said the priority is rising the price of a barrel of crude. 

The cartel has been negotiating a production cut to stabilize the oil market. OPEC has proposed a production output range of 32.5 million to 33 million barrels per day (b/d), which is lower than its October production of 33.8 million b/d, BMO analysts wrote in a research note Tuesday.

"We believe that OPEC will agree to a modest reduction in production that should be enough to support an oil price trading range of $45 to $55 a barrel in 2017," the BMO analyst team said.

The analysts stressed that "failure is not an option;" they believe that if the cartel maintains or increases recent production levels, "global inventories will grow and the risk of oil prices retesting the $40 a barrel will increase."

Similarly, Seaport Global Securities believes that if OPEC cannot reach a production cut agreement at the Nov. 30 meeting in Vienna, oil prices would likely drop toward $40.

Yet, the firm says the Street is "handicapping a 70% chance" that OPEC will announce plans to cut production by 1 million barrels per day, "which likely sends prices higher by approximately $2."

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