Oil climbed to a two-week high as output curbs by OPEC and its allies continued to deplete the remnants of a global supply surplus.

Futures in New York rose as much as 1.2 percent after dropping on Monday. While U.S. inventories are forecast to have added 3.4 million barrels last week, that would mark slower growth than the prior week. OPEC and its partners, which are cutting output to ease the global glut, still expect markets to balance by about the third quarter, according to people familiar with the matter.

Oil has swung around this month after registering its worst February decline in half a decade. Yet record U.S. production and rising American stockpiles have prompted speculation that OPEC and its allies will have to extend their curbs into 2019 to reach their goal of reducing inventories to the five-year average.

“The oil market is in reasonably good health,” said Ole Sloth Hansen, an analyst at Saxo Bank A/S in Copenhagen. “Oil is settling into a wide range between $60 and $70. Storm clouds could emerge if global demand growth begins to be called into question.”

West Texas Intermediate for April delivery, which expires Tuesday, climbed as much as 72 cents to $62.78 a barrel on the New York Mercantile Exchange, the highest intraday level since March 6. The contract was at $62.51 as of 10:33 a.m. London time, with total volumes traded about 3 percent below the 100-day average. The more-active May futures rose 65 cents to $62.78.

Brent for May settlement gained 68 cents to $66.73 on the London-based ICE Futures Europe exchange, after slipping 0.2 percent on Monday. The global benchmark crude traded at a $3.96 premium to WTI for the same month.

U.S. crude inventories are at their highest since December and probably grew again last week, according to a Bloomberg survey before government data due Wednesday. While supplies are set for a fourth weekly advance, the expected increase is smaller than the 5 million-barrel gain a week earlier.

The Organization of Petroleum Exporting Countries and its partners are said to have complied with pledged curbs at a record rate of 138 percent in February. Compliance among the so-called OPEC-12 was 142 percent, while non-OPEC producers were at 130 percent, one person said, asking not to be named because the figures aren’t public.

Other oil-market news:

Saudi Arabia’s exports of diesel and gasoline soared to a record in January, underscoring its advantage over other producers who’re more dependent on shipments of lower-value crude. While U.S. shale companies are pumping record amounts of oil, the growth rate is flattening out for one closely watched category: drilled-but-uncompleted wells. Bearish options bets on the WTI curve are near the lowest in more than four years, according to the latest CFTC data, despite the prompt WTI spread flipping to contango. — Bloomberg

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