Oil Up to $65 on Saudi Commitment to Curb Output, Weak Dollar

Oil prices rose toward US$65 barrel Thursday, supported by Saudi Arabia's comment that it would rather see an undersupplied market than end an OPEC-led deal to withhold production too soon, and by a weak U.S. dollar.

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Saudi Energy Minister Khalid al-Falih said Wednesday the Organization of the Petroleum Exporting Countries would do better to leave the market tight than end the deal on cutting output too early. Saudi Arabia is OPEC's top producer.

Brent crude, the global benchmark, rose 32 cents to US$64.68 as of 09:43 GMT, extending the previous session's gain of US$1.64. U.S. crude was up 58 cents at US$61.18.

Oil also gained as the U.S. dollar weakened, falling to a 15-month low. A weaker dollar makes oil and other dollar-denominated commodities cheaper for holders of other currencies, potentially boosting demand.

The OPEC-led deal to cut output by 1.8 million barrels per day, almost 2 percent of global supply, started a year ago. Producers have succeeded in whittling down an excess of crude in storage that had been weighing on prices.

However, rising output in the United States is balancing the supply cuts by other producers.

U.S. crude production hit a record 10.27 million barrels per day, the Energy Information Administration said Wednesday, more than Saudi Arabia pumps with Riyadh's voluntary curb on its output and not far from Russia.