Oil prices were steady Thursday, hovering below multiyear highs, after the International Energy Agency said U.S. supply will grow faster than previously forecast.
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Brent crude, the global oil benchmark, rose 0.2% to $62.56 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.1% at $56.56 a barrel.
"Today's price action is more related to a rather dovish sounding monthly report from the International Energy Agency," said Giovanni Staunovo, commodity analyst at UBS Wealth Management.
Updated forecasts from the Organization of the Petroleum Exporting Countries, the IEA and the U.S. Energy Information Administration this week showed a divergence in the outlook for U.S. oil production, which hit a record high of 9.78 million barrels a day in the week ended Dec. 8.
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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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 a report Wednesday, the U.S. 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," Mr. Staunovo said.
Brent prices were partly supported by 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.
Nymex reformulated gasoline blendstock--the benchmark gasoline contract--rose 0.7% to $1.66 a gallon. ICE gas oil changed hands at $558.75 a metric ton, down $4.00 from the previous settlement.
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(END) Dow Jones Newswires
December 14, 2017 06:45 ET (11:45 GMT)