Oil prices rose Thursday, with the global benchmark hitting their highest level since June 2015 as investors jumped back into the market, after prices had pushed lower on news that a damaged pipeline could soon come back online.
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Brent, the global benchmark, rose for a fourth day, gaining 34 cents, or 0.53%, to settle at a fresh high of $64.90 a barrel on ICE Futures Europe. U.S. crude futures rose for a third straight day to settle up 27 cents, or 0.46%, at $58.36 a barrel on the New York Mercantile Exchange -- their second highest level of the year.
"It's still generally a bull market, and people are looking at where to buy into it," said Ric Navy, senior vice president for energy futures at RJ O'Brien & Associates LLC. "It's a momentum thing."
Prices fell earlier in the morning after Ineos, which owns the Forties Pipeline System in the North Sea, said it expects to complete repair work around Christmas and bring oil flowing through the pipeline "progressively back to normal rates" early in the new year.
The Forties system was shut down Dec. 11 after Ineos discovered a hairline crack in a pipe. The outage has stopped the flow of 450,000 barrels of oil a day, with the result of tightening supply in the region and propping up the price of Brent.
The expected "normalization of the supply line" and the return of crude to the market was responsible for pushing prices down slightly Thursday morning, said David Madden, a market analyst at brokerage CMC Markets.
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But prices recovered throughout the day -- a sign that the market is maintaining its bullish tilt, analysts said.
"The most supportive feature in today's session in our view was the ability of the complex to hold value in the face of an expected restart of the Forties pipeline early next week that could be followed by normal flows early next month," said Jim Ritterbusch, president of Ritterbusch & Associates.
The pipeline outage has helped widen the gap between Brent and the U.S. benchmark, which could mean that U.S. prices have more room to run and could hit $60 sooner than expected, Mr. Ritterbusch said.
Thursday's oil price increases come after prices were buoyed Wednesday after the U.S. Energy Information Administration released weekly data showing a 6.5 million-barrel decline in U.S. crude inventories for the week ended Dec. 15., beating analysts' forecasts.
But those daily price gains were "limited by yet another increase in U.S. oil production," according to Tamas Varga, an analyst at brokerage PVM Oil Associates Ltd. The EIA said U.S. output increased by 9,000 barrels a day last week, to 9.79 million barrels a day.
Prices have been steady since the Organization of the Petroleum Exporting Countries and other producers including Russia agreed late last month to extend production curbs through the end of next year.
OPEC and 10 producers outside the cartel first agreed a year ago to hold back crude output by nearly 2% in an effort to drain a global supply glut that has weighed on prices since late 2014.
Gasoline futures rose 1.23 cents, or 0.71%, to $1.7476 a gallon. Diesel futures rose 0.6 cent, or 0.31%, to $1.9502 a gallon.
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(END) Dow Jones Newswires
December 21, 2017 16:13 ET (21:13 GMT)