U.S. crude futures closed nearly 3 percent higher on Thursday, lifted by a weaker dollar and a report sourced to a senior OPEC delegate that Saudi Arabia would next year propose a deal to balance oil markets with non-OPEC help.

Short-covering after Wednesday's price slump of more than 4 percent and a rally in diesel products also helped Brent and U.S. crude futures rebound.

was up $1.43, or 3.37 percent, at $43.93 per barrel by 2:33 p.m. EST. The global crude benchmark hit a session low of $42.43 on Wednesday, just 20 cents above a 6-1/2 year low set in August.

West Texas Intermediate (WTI) settled $1.14 higher, or 2.85%, at $41.08 a barrel after its front-month January futures hit a contract low of $39.84 on Wednesday.

The front-month contract for ultra low sulfur diesel, more commonly known as heating oil, was up 4.7percent. Gasoline futures were up 2.8 percent.