Updated from 1:19 p.m. ESTCrude oil prices Thursday erased early losses to close sharply higher. The December futures contract for light sweet crude gained $2.17 to $45.56 a barrel in Nymex floor trading, having lost more than 1% Wednesday in reaction to the inventory data. The turnaround came on signs OPEC members had followed through on the cartel's agreement in December to trim production by one million barrels a day in January. Saudi Arabia last week indicated it had executed a 500,000-barrel-a-day production cut, sparking a major price rally. The Department of Energy reported Wednesday that inventories of distillates, which include heating oil, fell much more than expected in the last week after a decline the week before. The supply-and-demand equation for heating oil is a major market focus at this time of year, with weather forecasts for North America and Europe playing a key role. The recent wave of unseasonably warm weather in the northern U.S. -- which is expected to continue for another week or so -- has been a drag on prices. Prices have been unusually volatile in the past two weeks with moves of 4% to 5% in one direction or another. The benchmark U.S. crude is down about 20% since touching a record high of more than $55 a barrel on Oct. 26. Nevertheless, oil prices are about 30% higher than a year ago.