Oil prices gained on Feb. 16 as the dollar slipped to a three-year low and global stocks headed for their biggest weekly gain in six years.
U.S. West Texas Intermediate crude for March delivery was up 6 cents at $61.40 a barrel (bbl) by 5:10 a.m. CST (11:10 GMT), after touching a one-week high of $61.89. Activity was subdued as many Asian markets were closed for the Lunar New Year holiday.
For the week, the U.S. crude contract has risen about 4% after losing nearly 10% last week.
London Brent crude was up 15 cents at $64.48. Brent is up nearly 3% for the week after falling more than 8% last week.
"Oil is getting support from a rebound in global stock markets and a weak dollar, but the upside is limited due to a projection for rising U.S. production," said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting in Tokyo.
The dollar slipped to a three-year low against a basket of currencies on Feb. 16 but later regained some ground. A weaker dollar often boosts oil and other dollar-denominated commodities.
World shares were set to post their best week of gains in six years after two consecutive weeks in the red.
Also supporting oil prices was a statement from the United Arab Emirates energy minister late on Feb. 15 saying oil producers led by Saudi Arabia and Russia aimed to draft an agreement on a long-term alliance by year-end.
OPEC and some non-OPEC producers including Russia have been restraining production by 1.8 million bbl/d to prop up prices. The arrangement expires at the end of 2018.
However, surging U.S. production is offsetting those efforts. U.S. crude output hit a record 10.27 million bbl/d last week, the Energy Information Administration said Feb. 14, making it a bigger producer than Saudi Arabia.
"Drilling activity in the U.S. continues to pick up ... Adding to this, producers appear to be more efficient than they were mid last year," ING said in a note, adding that rising U.S. supplies and the liquidation of speculative longs were likely to keep oil prices under pressure.
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