Oil prices extended gains on Thursday as a weak dollar and supportive comments from Saudi Arabia outweighed record U.S. production and rising inventories.
U.S. West Texas Intermediate (WTI) crude futures ended Thursday's session up 74 cents, or 1.2 percent, at $61.34 a barrel, extending the 2.4-percent gain the day before.
Brent crude futures pared earlier losses and were down 2 cents to $64.34 per barrel at 2:29 p.m. ET, after Wednesday's 2.6-percent climb.
The premium of Brent over WTI was near its lowest in six months.
The dollar was approaching the 3-year low hit in late January. A weaker dollar makes oil and other dollar-denominated commodities cheaper for holders of other currencies.
"I'm surprised that oil prices are falling today given the weaker U.S. dollar. Currently, the direction of the dollar is having a bigger impact on oil prices than fundamentals," said Rob Thummel, portfolio manager at energy investment manager Tortoise Energy.
Oil had climbed on Wednesday and early on Thursday after Saudi Energy Minister Khalid al-Falih said OPEC would do better to leave the market tight than end the deal on cutting output too soon.
"Khalid al-Falih gave his strongest hint yet that exiting the current supply agreement is unlikely to be on the agenda this year," said Tamas Varga of oil broker PVM.
Under the deal, the Organization of the Petroleum Exporting Countries agreed to cut output by 1.8 million barrels per day, representing almost 2 percent of global supply. The cuts started a year ago and will run until the end of 2018.
But the rebound in U.S. production, encouraged by the higher prices delivered by the OPEC-led cuts, is undermining efforts to curb supplies. The EIA expects U.S. production to top 11 million bpd in late 2018, a year earlier than projected last month.
"Persistently high oil production in the United States, the country's gasoline stocks at their highest level since March 2017, and a shrinking price premium of Brent over WTI crude portrays a bearish picture for oil prices," said Abhishek Kumar, Senior Energy Analyst at Interfax Energys Global Gas Analytics.
U.S. crude output hit a record 10.27 million barrels per day, the Energy Information Administration (EIA) said on Wednesday, making it a bigger producer than Saudi Arabia.
EIA also said crude inventories rose by 1.8 million barrels in the week to Feb. 9, an increase that was less than analysts' forecasts. Gasoline stocks, meanwhile, climbed by 3.6 million barrels, more than double the forecast.
Gasoline stocks rose by 3.6 million barrels, more than double the forecast.
"Although we remain positive on crude oil prices until year-end, an interim correction into 1Q18 cannot be ruled out," said Barnabas Gan, economist at OCBC Bank in Singapore.
— CNBC's Tom DiChristopher contributed to this report.