Oil prices settled higher on Thursday, as a major pipeline outage outweighed increasing crude supply.
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Light, sweet crude for January delivery rose 44 cents, or 0.8%, to $57.04 a barrel on the New York Mercantile Exchange. Brent, the global oil benchmark, gained 87 cents, or 1.4%, to $63.31 a barrel.
Prices rose earlier this week on the shutdown of the Forties Pipeline system in the North Sea, which could take around 8 million barrels of oil out of the market if it remains closed for three weeks, according to brokerage PVM.
However, signs of increasing supply has put pressure on the market. On Thursday, the International Energy Agency said U.S. shale producers have pushed global oil supply to the highest level in a year. The agency also raised its forecasts for U.S. crude production growth for 2017 and 2018.
The IEA forecast the greatest growth at an average of 1.1 million barrels a day in 2018, making it difficult to envisage further falls in global oil stocks.
"Our current outlook 2018 may not necessarily be a happy New Year for those who would like to see a tighter market," the IEA said in its monthly report published Thursday, adding that total supply growth could exceed demand growth.
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On Wednesday, the U.S. Energy Information Administration reported that U.S. production climbed to a weekly record high last week of 9.78 million barrels a day, building on a string a fresh weekly highs.
This poses challenges for OPEC's hope of draining global stocks.
In a deal struck in November, OPEC and other producers including Russia agreed to extend supply cuts which began in January through 2018 as it targets bringing stocks in the Organization for Economic Cooperation and Development back in line with their five-year average. The IEA said stocks remained 111 million barrels above the five-year average.
"We see the spate of supply projects, excluding OPEC countries and the developments in U.S. shale, taking their toll on the market and keeping prices in check next year," analysts at consultancy JBC Energy wrote in a note.
In the Wednesday report, the EIA said crude stocks fell 5.1 million barrels in the week ended Dec. 8. However, the fall was offset to some extent by gasoline stocks rising by 5.7 million barrels.
"The fear is that the barrels are moving from one place to the next, essentially not disappearing from the system," said Giovanni Staunovo, commodity analyst at UBS Wealth Management.
Gasoline futures rose 1.5% to $1.6707 a gallon and diesel futures advanced 0.3% to $1.9099 a gallon.
Stephanie Yang contributed to this article.
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(END) Dow Jones Newswires
December 14, 2017 17:04 ET (22:04 GMT)