NEW YORK (CNNMoney.com) - Oil prices settled more than $2 higher Thursday, after touching $64 a barrel on domestic and Nigerian supply worries.

U.S. light sweet crude for May delivery settled up $2.14 to $63.91 a barrel in afternoon trading on the New York Mercantile Exchange. The price of crude hit $64 a barrel earlier in the session.

Many market observers attributed the price spike to a delayed reaction to Wednesday's Energy Information Administration (EIA) report, which revealed a larger-than-expected drop in crude stockpiles within the United States.

Crude oil stockpiles in the United States fell 1.3 million barrels last week, according to the EIA report. Economists polled by Reuters had forecast a rise of 2.5 million barrels.

Following Wednesday's report, however, prices surprisingly fell 57 cents to $61.77 a barrel.

"Yesterday's report showed draws across the board and for some reason it didn't take," Peter Beutel, an oil analyst and president of Cameron Hanover, told CNNMoney.com.

Adding to supply fears was a decision by Italian oil firm Eni that it would not honor contracts on its Nigerian Brass River crude exports following a pipeline attack last week, a U.S.-based official aware of the situation told CNNMoney.com.

Phil Flynn, an analyst at Alaron Trading in Chicago, said the news provided additional reasons for crude prices to rise.

"The momentum was already in place before," Flynn told CNNMoney.com. "This story was the icing on the cake."

The Eni official said 75,000 barrels were shuttered as result of last week's attack, with Eni owning a 13,000 barrel stake.

The news may have sparked fears that oil that was expected to come to market may not reach buyers.

Crude production in Nigeria has slowed in recent months following a wave of militant attacks on pipelines and refineries within the country.

Beutel also speculated that some fund buying at $63.25 had hand in crude's upward momentum.

Worries about gasoline inventories have pushed oil and gasoline futures higher recently as traders fear supplies will be pinched ahead of the busy summer driving season.

In its report Wednesday, EIA said gasoline inventories dropped by 2.3 million barrels last week, while distillates, used to make heating oil and other products, slipped by 0.8 million barrels last week.

Crude inventories currently stand at their healthiest level in nearly seven years and have helped outweigh fears that supplies in some producer countries, notably Nigeria and Iran, could be disrupted.

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