Oil prices rose about 1% to three-year highs on Thursday, pushing the global Brent benchmark past $70 a barrel, on further signs of tightening supply in the United States and expectations that Opec’s output cuts would underpin the market.

Brent crude futures settled 6 cents higher at $69.26 a barrel, after hitting $70.05 a barrel during the session, its highest level since November 2014. Brent's settlement still represents a three-year closing high.

Brent has gained 5% since the beginning of the year, picking up from its late-year surge.

US West Texas Intermediate crude futures settled at $63.80 a barrel, up 23 cents, the highest since December 2014.

Prices came off highs after an early surge that took benchmarks past key resistance levels that produced a flurry of buying in an active day in the market. However, analysts said it would take more than one day to convincingly break through $70 a barrel on Brent.

"The propulsion of the upside was due to short-covering and no buying," said Marty Wallace, broker for iitrader.com LLC in Chicago.

The relative strength index (RSI), which measures the speed and breadth of a rally, shows oil in an overbought condition, suggesting the move has come too far, too fast.

"(US) crude oil inventories are at their lowest level since August 2015," said PVM Oil Associates analyst Tamas Varga. "Opec is edging ever closer to its desired target of reducing OECD industrial stocks to the five-year average."

On Wednesday, the US Energy Information Administration said crude inventories fell almost 5 million barrels to 419.5 million barrels last week. Production slowed by nearly 300,000 barrels per day, which analysts attributed to colder-than-usual weather across the United States last week.

Adding to bullish sentiment on Thursday, market intelligence firm Genscape estimated a draw of more than 3.5 million barrels at the Cushing, Oklahoma delivery point for US crude futures for the week ended Tuesday, according to traders who saw the data.

"The steady, if not rapid, decline in US crude oil inventories from persistently high refinery demand and elevated exports has firmly registered with the market," said John Kilduff, partner at Again Capital LLC in New York.

Production cuts led by the Organization of the Petroleum Exporting Countries and Russia, which are set to continue throughout 2018, have underpinned prices.

The United Arab Emirates Energy Minister and Opec President Suhail al-Mazrouei said he expects the market to balance in 2018 and that the producer group is committed to its supply-reduction pact until the end of this year.

The greenback-denominated commodity has also benefited from weakness in the dollar, which neared a one-week low on Thursday, as it makes oil cheaper to buy for holders of other currencies.

Trading volumes were higher than average, with a flurry of deals at about 10:00 a.m. EST as prices jumped. More than 566,000 US crude contracts had changed hands on Thursday as of 12:10 p.m., not far from the daily average of 619,000 contracts over the past 200 days of trading.

Brent may not be able to sustain a $70 level unless additional news from the Middle East bolstered bullish sentiment, analysts said.

ICE Commitment of Traders figures showed speculators raised their net long holdings of Brent crude futures and options in the week to January 2 to a new record. Heavy bets like this are at risk of being unwound after quick gains.

"You have a very overbought market. Oil is acting like an Internet stock and when it does that you know it’s getting overcooked," said Walter Zimmerman, chief technical analyst for United-ICAP.