Oil rose, clinging to last week's gains as political tensions in Iran and declining exploration work in the U.S. threatened output growth.
West Texas Intermediate (WTI) for February delivery added 29 cents to settle at $61.73 a barrel on the New York Mercantile Exchange. Brent touched $68.27 last week, its highest since May, 2015.
Yet, surging USA production could offset some of the cuts from OPEC producers, as US production rose to 9.78 million barrels a day (MMBPD) in the latest week, according to last Wednesday's report.
"The potential for new sanctions, which could restrict [crude] supply" is supporting prices, said Geordie Wilkes, a research analyst at brokerage Sucden Financial.
A key U.S. government report on Wednesday is expected to show crude stockpiles dropped for an eighth straight week.
"In view of sharply falling US crude stocks and record-high compliance with the production cuts by OPEC, market participants are convinced that the market is continuing to tighten", according to analysts at Commerzbank.
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OPEC officials also think the 2018 rally has been mainly driven by unrest in Iran, rather than a tighter balance between supply and demand, giving rise to concern it may not last. Economic collapse is leading to involuntary production cuts in Venezuela, another OPEC member.
The agreement, which was implemented at the start of 2017, was meant to rein in the global supply glut and raise prices.
Nationwide output will average 10.85 million barrels a day next year and 10.27 million this year, both surpassing the prior record of 9.6 million pumped in 1970, the Energy Information Administration said in its monthly Short-Term Energy Outlook, which included the first estimates for 2019.
Traders said the gains were due to a slight decline in the number of United States rigs drilling for new production, which eased by five in the week to January 5, to 742, according to data from oil services firm Baker Hughes.
Some analysts have said a rise in US shale oil production could discourage OPEC and Russian Federation to maintain their deal to curb supply until the end of the year for fears of losing market share.
Gasoline futures gained 2.5% to $1.8362 a gallon and diesel futures rose 1% to $2.0662 a gallon.