Crude oil edged up towards $111 a barrel on Wednesday, recovering slightly from a drop in the previous session, supported by the closure of the Brent pipeline system in the North Sea.
Gains were limited as weak European data pushed down other risk-sensitive assets such as equities, and as OPEC released a downbeat assessment of demand for its oil output in 2013.
Benchmark Brent crude oil futures for February were up 15 cents to $110.50 a barrel by 1346 GMT. The February contract, which expires later in the day, settled $1.58 lower in the previous session, while the more heavily traded March contract ended down $1.32.
U.S. oil rose 5 cents to $93.33 a barrel.
The Brent pipeline system, which with oil from other fields in the UK North Sea underlies the futures contract, was shut as a result of the closure of the Cormorant Alpha oil platform, affecting as much as 90,000 barrels per day.
Abu Dhabi oil company TAQA said it had no restart date for oil output stopped after a leak at the platform, linked into Britain's 20-field Brent system.
"Pipeline outages in the North Sea have been putting (upward) pressure on Brent prices. Brent supply has been pretty unreliable over the past year and these interruptions have led to high price volatility," Jason Gammel, a commodities analyst at Macquarie, said.
Geopolitical factors were also supportive of oil prices. In Algeria, Islamist militants kidnapped at least seven foreigners and killed a French national, creating worries about potential supply disruption.
Investors were reassured by a solid 0.5 percent rise in December U.S. retail sales, which beat expectations for a 0.2 percent increase and showed consumers were resilient although at the time they faced the possibility of automatic tax increases and government spending cuts.
In Europe, however, demand for new cars fell in December to the lowest level since 1995, registrations data showed, adding to figures the previous day showing Germany's economy shrank at the fastest pace in almost three years in the final quarter of 2012.
OPEC also said it expected demand for its crude this year to be lower than initially expected because of higher supply from rival producers, indicating inventories could build up substantially if the producer group maintains current output.
The World Bank on Tuesday sharply cut its forecast for 2013 global gross domestic product growth from 3.0 percent to 2.4 percent, which compared with 2.3 percent last year, weighed down by a sluggish recovery of developed countries.
"The World Bank downgrade was a bit of a surprise and led to a bias in equity markets. Oil could turn lower later in the day," Michael Hewson, an analyst at CMC Markets, said.
Investors looked ahead to China's GDP numbers due on Friday, which are expected to show its annual economic growth quickened to 7.8 percent in the fourth quarter, according to a Reuters poll, snapping seven straight quarters of weaker expansion.
"A return of Chinese demand is bound to boost the oil markets," Gammel at Macquarie said.
Prices were also supported by data from the American Petroleum Institute that showed crude stockpiles rose by 46,000 barrels in the week to Jan. 11, compared with an expected 2.3 million barrel increase.
Investors awaited data from the Energy Information Administration later in the day to get a clearer picture on U.S. stockpiles.
Analysts in a Reuters poll expected a rise for a second week on an increase in imports. The poll of nine analysts forecast crude stocks would have risen 2.3 million barrels for the week ended Jan. 11. (Editing by Anthony Barker)