NEW YORK (Reuters) - Oil prices rose for the third day on Wednesday as OPEC forecast higher demand for 2018 and heightened tensions in Kurdistan supported prices.

FILE PHOTO: Pump jacks pump oil at an oil field on the shores of the Caspian Sea in Baku, Azerbaijan, October 5, 2017. Picture taken October 5, 2017. REUTERS/Grigory Dukor

Brent crude futures LCOc1 rose 33 cents, or 0.6 percent, to settle at $56.94 per barrel. Brent rose 2 percent the previous day.

U.S. West Texas Intermediate (WTI) crude futures CLc1 rose 38 cents, or 0.8 percent, to $51.30 a barrel.

The Organization of the Petroleum Exporting Countries forecast stronger demand for its oil in 2018 and said production cuts by producing nations were clearing the global crude glut.

U.S. oil exports are pouring into the market at a record pace, but the world's second largest crude trader Glencore GLEN.L said the market can absorb the volumes along with those from the North Sea and West Africa.

“I think the market is able to absorb that 2 million bpd of U.S. exports easily,” Glencore’s head of oil trading Alex Beard told the Reuters Global Commodities Summit. “I don’t think there are many losers out there.”

Saudi Arabia said it pumped 9.97 million barrels per day in September, up from August, but still below target.

OPEC and other producers, including Russia, agreed to cut output by 1.8 million barrels per day (bpd). The United States is not party to the deal, and its crude output has risen 10 percent this year to more than 9.5 million bpd. C-OUT-T-EIA

After settlement, crude prices pared gains when the industry group the American Petroleum Institute said its data showed U.S. crude stocks rose unexpectedly last week, while gasoline inventories decreased and distillate stocks built.

API said crude inventories rose 3.1 million barrels in the week to Oct. 6. Analysts had expected a draw of 2 million barrels. The U.S. Department of Energy reports official data on Thursday. [EIA/S]

Rob Haworth, senior investment strategist at U.S. Bank Wealth Management said OPEC and oil bulls were “hoping U.S. producers slow down production and make further progress on inventory cuts.” He said the picture was “not clear because you still have hurricane related news.”

Iraqi government forces and Iranian-trained Iraqi paramilitaries are “preparing a major attack” on Kurdish forces in the oil-rich region of Kirkuk and near Mosul in northern Iraq, the Kurdistan Regional Government (KRG) said.

Although an Iraqi military spokesman denied any attack, John Kilduff, a partner at Again Capital LLC, said “worries over Kurdistan are helping...get us back over 51.”

Monroe Energy, a subsidiary of Delta Air Lines Inc DAL.N, was shutting its 185,000 barrel-per-day Trainer, Pennsylvania, refinery due to a fire on Wednesday, a source familiar with the plant's operations said.

News of the outage sent U.S. gasoline margins RBc1-CLc1 up as much as 4.4 percent to a session high of $16.62 a barrel.