Oil futures settled with a loss of 1% on Thursday, as a stronger dollar helped fuel a pullback in the U.S. benchmark from its highest level of the year. Traders assessed a report Thursday from an international energy watchdog that said crude demand was rising around the globe, but supply growth would stay strong. July West Texas Intermediate crude lost 66 cents, or 1.1%, to settle at $60.77 a barrel on the New York Mercantile Exchange. Prices had settled at $61.43 on Wednesday, the highest since December, based on the most-active contracts. July Brent crude fell 59 cents, or 0.9%, to $65.11 a barrel on London’s ICE Futures exchange.

In a monthly report, the International Energy Agency estimated demand will increase by 1.4 million barrels a day, to average 94 million a day this year. That’s higher than previously forecast, as economic growth, colder winter weather conditions and lower crude prices lifted consumption in the first half of 2015.

But the IEA also said supply growth will remain strong. Saudi Arabia, Iraq and the United Arab Emirates are pumping at record monthly rates to keep output by the Organization of the Petroleum Exporting Countries more than 1 million barrels a day above the organization’s output ceiling of 30 million barrels a day, which the oil cartel reaffirmed last week.

Matt Parry, senior oil analyst at the IEA, pointed out to Market Watch in an email that “short-term imbalances in the refining system seem to be driving the recent crude-oil price rally, and not a shortage of crude,” which still looks well supplied. The IEA report said “a temporary imbalance has emerged as project delays and setbacks have prevented emerging non-OECD refiners from keeping up with local demand growth.” “In essence, rising gasoline prices seem to be driving up crude-oil prices,” Parry said.