Oil prices rose on Thursday after a survey showed OPEC's commitment to its supply cuts remains in place, even as U.S. production topped 10 million barrels per day for the first time since 1970.
U.S. West Texas Intermediate crude for March delivery ended Thursday's session up $1.07, or 1.7 percent, at $65.80 a barrel. The contract rose back above $66 a barrel after the settle at 2:30 p.m. ET and was trading not far from the recent three-year high of $66.66.
Brent crude futures, the international benchmark for oil, rose 76 cents cents, or 1.1 percent, to $69.65 a barrel by the close.
Oil prices are unlikely to advance much above $70 a barrel in 2018, given the tug of war between OPEC and the U.S. shale industry, a Reuters poll showed on Wednesday.
U.S. crude oil production in November surpassed 10 million barrels per day for the first time since 1970, and neared the all-time output record, the Energy Information Administration said on Wednesday.
The EIA also reported the biggest increase in crude oil stocks since March last year, a rise of 6.8 million barrels.
Output by the Organization of the Petroleum Exporting Countries (OPEC) also rose in January from an eight-month low as higher output from Nigeria and Saudi Arabia offset a further decline in Venezuela, a Reuters survey found.
However, adherence by producers included in the deal to curb supply rose to 138 percent from 137 percent in December, suggesting commitment is not wavering even as oil prices hit their highest since 2014.
"The compliance rate of 138% is getting the attention, but it is really a reminder of the stark decline in output in Venezuelan oil output," said John Kilduff, partner at energy hedge fund Again Capital.
"Saudi and Nigerian output rose last month, but the increasing loss of Venezuelan barrels have reached a point that it is starting to be felt, and it is a grade of crude, relied upon by U.S refiners that is not easily replaced."
Brent crude rose by 3.3 percent in January, its strongest start to the year for five years, in line with a broad rise in other risk-linked assets such as , which hit record highs last month and marked their biggest January increase since 1997.
With investors now pondering which of oil's current key driving forces will prove to be the dominant one — rising U.S. crude output or OPEC's adherence to its supply cuts — the relationship with equities and even the dollar is likely to erode.
"I don't think it's durable, that suddenly we see oil and the S&P attached at the hip. They have coincidentally done well and it's profit-taking. But I think their fortunes are going to diverge and this correlation won't survive the test of time," London Capital Group head of research Jasper Lawler said.
"The other factor is that big $70 level in Brent. That is pretty much the top of the range for most forecasts out there. So again, that's a price level that gives some pause for thought. I don't think we should go back to 60 but I think probably 65 seems like a logical area to ... start refocusing on the fundamentals of the market versus general sentiment."
Goldman Sachs raised its three-month forecast for Brent to $75 from $62 and its six-month forecast to $82.50.
— CNBC's Tom DiChristopher contributed to this report.
