Oil advanced to a two-week high as the shrinking size of U.S. crude production gains and a falling dollar outweighed rising supply.
U.S. crude production rose 3,000 barrels a day to 9.42 million in the seven days ended March 20, the Energy Information Administration said. The smallest increase since January left output at the highest level in more than three decades. Prices retreated initially as the report showed that crude supplies increased 8.17 million barrels to 466.7 million last week, the most in records compiled since August 1982.
U.S. oil explorers sidelined 41 drilling rigs last week, the smallest drop in three weeks and down from the average 59-rig weekly decline in February, according to data from Baker Hughes Inc. The dollar dropped for the sixth time in eight days against the euro, bolstering raw materials denominated in the U.S. currency.