NEW YORK (CNNMoney.com) -- Oil prices climbed back above $64 barrel, then settled below that level after a government report revealed a bigger than forecast drop in crude stocks along with a jump in inventories of other products.

U.S. light sweet crude for October delivery fell as low as $63.50 after the report but climbed back to stand at $63.97, up 21 cents, at close Wednesday on the New York Mercantile Exchange.

Just before the government report, the contract was up 40 cents at $64.16. It tumbled below $64 right after the figures were released, then rebounded as high as $64.42 before falling back down.

Oil fell for the seventh straight session Tuesday, sinking 3 percent to a six-month low and marking its longest losing streak in nearly three years. Prices are now sharply off from the record trading high of $78.40 and the record closing high of $77.03, hit on July 14.

In its report, the Energy Information Administration said inventories of distillate fuel rose 4.7 million barrels last week. Reuters reported that distillates - used for heating oil - were expected to climb 1.7 million barrels.

"The market took the data as a negative," said Jim Quinn, a NYMEX floor analyst for AG Edwards. "But now the market is turning around a bit, but it's choppy, it's thin and it's nervous."

Crude oil inventories fell 2.9 million barrels, versus forecasts for a decline of 1.9 million barrels, according to Reuters. At 327.7 million barrels, oil inventories remain well above the upper end of the average range for this time of year.

The inventory decline comes after OPEC said Monday it would maintain its production ceiling of 28 million barrels a day but warned it may discuss production levels again before the end of the year.

Many analysts say the extent of the crude's price decline depends on OPEC deciding what price it is ready to defend.

Crude gained some support earlier Wednesday after Nigerian oil workers began a three-day strike to voice security concerns in the Niger Delta. Nigeria's top oil official said the strike would not affect the country's output.

In related news, the European Union is scheduled to resume talks with OPEC member Iran over its nuclear enrichment program on Thursday.

World powers are split over whether Iran should face sanctions for disregarding an Aug. 31 U.N. Security Council deadline for suspending its nuclear program.

Total motor gasoline inventories rose by 100,00 barrels last week, putting them just above the upper end of the average range. Gasoline inventories were expected to remain unchanged last week, according to Reuters.

Shares of the nation's biggest oil companies, Exxon Mobil (up $0.69 to $65.39, Charts), Chevron (up $0.94 to $62.33, Charts) and ConocoPhillips (up $1.21 to $59.35, Charts), rose modestly after the government inventory numbers were released.

--from staff and wire reports

(Correction: An earlier version of this story incorrectly stated that crude oil inventories rose. CNNMoney.com regrets the error).

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