By Sarah McFarlane

--Oil prices swung between gains and losses Thursday as traders weighed declining U.S. stockpiles against higher production around the world.

--Light, sweet crude for January delivery was up 1.4% to $51.88 a barrel on the New York Mercantile Exchange.

--Brent, the global benchmark, gained 1% to $60.76.

HIGHLIGHTS

IEA: Global oil inventories are on the rise, with commercial stockpiles in Organization for Economic Cooperation and Development countries up by 5.7 million barrels to 2.872 billion barrels in October.

For the first time since March, stockpiles rose above the five-year average -- a key metric used by the Organization of the Petroleum Exporting Countries when targeting inventories. OPEC and its partners including Russia agreed to cut output by 1.2 million barrels at a meeting last week.

"The agreed cuts do have an impact, they make the supply and demand balance less bearish, but they don't make it bullish," said Tamas Varga, an analyst at brokerage PVM.

The OECD inventories could rise to 2.9 billion barrels by the start of 2019, with no stock draw expected unless there is an unplanned supply disruption, Mr. Varga said.

U.S. Inventories: The Energy Information Administration reported Wednesday that crude stocks fell by 1.2 million barrels in the week ended Dec. 7, less than the average expectation of a 2.8 million barrel fall, according to a survey of analysts and traders by The Wall Street Journal.

"I expected the market to go up and the fact it couldn't hold gains yesterday surprised me. What's happening today to me looks like what should have happened already," said Bill O'Grady, chief market strategist at Confluence Investment Management.

INSIGHT

OPEC+: Data from the three main energy organizations -- the IEA, EIA and OPEC -- show consensus on rising global inventories, indicating it is likely that 2019 will start with much higher OECD stock levels than a year earlier.

Analysts said the recent cuts agreed by OPEC and its allies won't be enough to tackle the surplus, according to the latest supply and demand forecasts from the three agencies, so stocks will continue rising. OPEC faces the dilemma of giving up further market share if it contemplates more drastic cuts, the analysts added.

AHEAD

Stephanie Yang contributed to this article.

Write to Sarah McFarlane at sarah.mcfarlane@wsj.com

(END) Dow Jones Newswires

December 13, 2018 13:24 ET (18:24 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.