* EIA reports record U.S. crude stock build; distillates
draw
* Prices off lows but little chance of big rally
* Prices down nearly 80 percent since mid-2014
(Adds details, changes dateline from LONDON, updates prices,
adds quote)
By Devika Krishna Kumar
NEW YORK, Jan 27 (Reuters) - Oil futures surged 5 percent on
Wednesday, after Russia said co-operation with major oil
producers was discussed and U.S. data showed a surprise spike in
demand for products such as heating oil last week, when a
massive blizzard hit the country.
Russia's energy ministry said possible coordination between
Russia and the Organization of the Petroleum Exporting Countries
(OPEC) was discussed at a meeting with Russian oil companies on
Wednesday. Top non-OPEC producer Russia has been unwilling to
cut oil output, as it battles for market share with OPEC
king-pin Saudi Arabia.
Hints of a possible deal between OPEC members and rival
producers to tackle one of the biggest global supply gluts in
decades, had already helped oil rally 4 percent on Tuesday.
Brent crude LCOc1 rose $1.61 to $33.40 a barrel, a 5
percent gain, by 12:20 p.m. EST (1720 GMT), after dropping to a
session low of $30.83.
U.S. crude CLc1 was $1.30 higher at $32.74 per barrel, a
4 percent gain, having hit a low of $30.14.
Heating oil futures HOc1 on Wednesday rose more than 6
percent, boosted in part by further forecasts for cold weather
later this week.
Data from the U.S. Energy Information Administration showed
inventories of distillates, including as heating oil, fell more
than 4 million barrels, trumping expectations for a rise of
nearly 2 million. EIA/S
"The draw in distillate stocks is bullish, but we know there
was cold weather in the United States in the last week, so I
would say the reason behind the draw has something to do with
the cold winter weather and, as such, the impact should be
short-lived," Tamas Varga of PVM Oil Associates said.
The data also showed U.S. crude oil stocks hit their highest
on record in the week to Jan. 22, due largely to increases on
the U.S. Gulf Coast, a major oil hub.
Partly fuelling the rally was relief that the build in
inventories shown by the EIA fell short of an 11.5
million-barrel build reported by the American Petroleum
Institute. API/S
"Overall, the numbers are bearish but not nearly to the
extent of the API data. So I think there's a little bit of short
covering based on that right now," Energy Management Institute
analyst Dominick Chirichella said.