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.
Brent crude futures, the worldwide benchmark for oil prices, were up 29 cents at $63.60 a barrel at 1400 GMT. "At this stage, it is still too early to say how quickly the fix will take, but it is expected to be a matter of weeks rather than days".
West Texas Intermediate for January delivery rose 29 cents to $57.33 a barrel at 11:30 a.m. on the New York Mercantile Exchange and was down 3 cents for the week.
The pipeline was reported to carry about 450,000 barrels a day of Forties crude from offshore fields in the North Sea to a processing plant in Scotland.
While the pipeline outage physically mostly affects the North Sea region, it is of global relevance as the crude it supplies is part of the supply that underpins the Brent price In the last 24 hours, a safety cordon around the damaged pipeline has been halved as a crack has not grown.
While the Forties shutdown has provided a price floor, early gains quickly evaporated in a global market that is still oversupplied and with output rising in the United States. Due to concerns over increasing USA production, prices would be a lot lower if not for the Forties pipeline shutdown and the reported draw by the EIA. The fact that the market sold off so much after the Forties outage shows that the market struggles to trend higher.
In the Wednesday report, the EIA said crude stocks fell 5.1 million barrels in the week ended December 8. Global margins declined in November, losing nearly $1/bbl.
Brent crude futures settled at $62.44 a barrel, the same settlement as Wednesday.
The U.S. government's Energy Information Administration releases its weekly oil report on Wednesday.
With cash pouring into the US shale oil industry, the United States is on track to deliver up to 80 percent of the world's oil production gains through 2025, the IEA estimates.
But the IEA warned that "when our US outlook is added to expectations for the other producers, output from non-OPEC countries could rise by 1.6 million per day in 2018, an increase of 200,000 bpd to our [previous] forecast".