By Sarah Mcfarlane and Alison Sider 

Oil prices were higher Monday, as an explosion in one of New York City's busiest transit hubs and expectations that cold weather will increase demand for fuel helped lifted prices.

U.S. crude futures recently rose 20 cents, or 0.35%, to $57.56 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 64 cents, or 1.01%, to $64.04 a barrel on ICE Futures Europe.

Prices rose Monday morning after a Bangladeshi man tried to set off an explosive device at New York City's Port Authority Bus Terminal.

"When the market get scared the hard assets tend to get bid up," said John Kilduff, founding partner at Again Capital.

And rising fuel prices also boosted crude prices.

Donald Morton, senior vice president at Herbert J. Sims Co., who oversees an energy trading desk, said fuel prices were pulling crude higher Monday morning, as a blast of cold weather prompted trader to buy distillates.

"Crude oil is not leading it's only following. The leader is this weather-driven event," he said.

"Our distillate inventories are too low to go into winter."

Gasoline futures recently ticked up 0.4 cent, or 0.23%, to $1.7206 a gallon. Diesel futures rose 1.64 cents, or 0.85%, to $1.9452 a gallon.

But third consecutive week of increased drilling activity and uncertainty about how long the Organization of the Petroleum Exporting Countries will continue cutting production limited oil's gains.

On Friday, Baker Hughes Inc. reported that the number of rigs drilling for oil rose by two last week to 751.

"Given the recent price rises and the hedging activity we've seen and the rise in rig count, it seems almost inevitable that there's going to be a large rise in U.S. production next year," said Tom Pugh, commodities economist at Capital Economics.

Goldman Sachs said it expects production outside of the Organization of the Petroleum Exporting Countries to rise by 550,000 barrels a day in the fourth quarter.

"This is largely driven by the long awaited ramp-up in U.S. shale production, which accelerated in September," the bank said in a note.

The U.S. Energy Information Administration's weekly data showed U.S. output hit a record of over 9.7 million barrels a day in the week ended Dec. 1.

Oil prices have risen by around 30% over the past six months as efforts by OPEC and other producers to cut output have helped reduce global stocks, but higher prices are motivating those outside of the agreement to boost production.

Last month OPEC, along with other major producers including Russia, agreed to extend their production cuts by nine months to the end of 2018. But signals from some members that the cuts could be phased out earlier if the market is rebalanced by June weighed on prices.

"Despite the renewed OPEC commitment to rebalancing the market, our fundamental analysis shows moderate global stock builds going into 2018, and we expect the bullish momentum to fade," said analysts at Société Générale in a note published on Monday.

The bank forecasts front-month Brent to trade at $58 a barrel in the first quarter of 2018 and $56 in the second quarter.

Write to Sarah Mcfarlane at sarah.mcfarlane@wsj.com and Alison Sider at alison.sider@wsj.com

(END) Dow Jones Newswires

December 11, 2017 11:09 ET (16:09 GMT)

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