* U.S. energy firms add most rigs in a quarter since 2017 - Baker Hughes
* U.S. crude oil inventories fell by 6.1 million barrels -EIA
* Brent and WTI contracts down about 20% this year (Updates with settlement prices.)
By Laura Sanicola
LONDON, Dec 30 (Reuters) - Oil prices settled higher on Wednesday, supported by a draw in U.S. crude inventories and Britain's approval of a second coronavirus vaccine but pressured by swelling year-over-year supply.
Brent crude futures LCOc1 settled up 25 cents to $51.34 a barrel, off the session high of $51.56 and well lower than the $66 price that started the year.
U.S. West Texas Intermediate (WTI) crude CLc1 settled up 40 cents to trade at $48.40, substantially down from about $62 at the start of 2020.
Both contracts slipped early the session as a bigger fiscal aid package in the United States looked increasingly unlikely, dampening hopes for a swifter recovery of oil demand that has been hammered by the COVID-19 pandemic. rallied after an Energy Information Administration report showed crude inventories fell by 6.1 million barrels in the latest week to 493.5 million barrels. EIA/S
But traders noted that U.S. crude inventories still were ending the year more than 10% higher than the last week of 2019.
"We couldn't even pull down storage levels with a 6.1 million inventory draw which is sad but a reality, and it took the wind out of the sails for a big rally" said Bob Yawger, director of energy futures at Mizuho.
On the supply front, U.S. energy firms this week added 3 oil and natural gas rigs to the best quarter for boosting the rig count since the second quarter of 2017, according to data from Baker Hughes. Jan. 4 meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies, including Russia, a group known as OPEC+, is set to boost output by 500,000 barrels per day (bpd) in January. prices found some support on Wednesday from the U.S. dollar hitting its lowest against a basket of currencies .DXY since 2018, making oil cheaper for holders of other currencies.
Raising hopes of a faster normalization of travel and work, Britain on Wednesday became the first country to approve a coronavirus vaccine developed by the University of Oxford and AstraZeneca AZN.L . vaccine rollout in the U.S. has rolled out slower than previously expected. Some 2 million people have been vaccinated, President-elect Joe Biden said on Tuesday, well short of the 20 million President Donald Trump had promised by the end of the year. (Additional reporting Shadia Nasralla and Naveen Thukral Editing by David Goodman, David Gregorio, Aurora Ellis and Chizu Nomiyama)