Oil erased gains as the dollar rebounded following comments by U.S. President Donald Trump that ultimately he wants a stronger greenback.

Futures lost 0.2 per cent after earlier gaining as much as 1.6 per cent on Thursday in New York. Trump told CNBC that earlier comments by Treasury Secretary Steven Mnuchin were taken out of context.

The dollar’s upward momentum has pushed crude prices lower, yet it will likely “be a temporary phenomenon,” Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said by telephone.

The Bloomberg Dollar Spot Index, a gauge of the currency against 10 major peers, rose after falling as much as 0.8 per cent. A stronger greenback typically reduces investors’ interest in commodities.

Oil has hit the highest since 2014 and lingers close to that level in New York as the Organization of Petroleum Exporting Countries and partners such as Russia trim output. In the U.S., crude stockpiles have fallen for 10 consecutive weeks, the longest stretch of declines on record, according to Energy Information Administration data released on Wednesday.

West Texas Intermediate for March delivery slipped 10 cents to settle at US$65.51 a barrel on the New York Mercantile Exchange, after rising to as high as US$66.66 during the session. Total volume traded was 33 per cent higher than the 100-day average.

Brent for March settlement fell 11 cents to end the session at US$70.42 on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of US$4.91 to WTI.

Spare oil at the biggest U.S. storage complex in Cushing, Oklahoma, are at lows not seen in about three years as refiners pay up for immediate shipments, creating a market structure known as backwardation, where barrels available now command higher prices than future supplies.

Supply and demand will return to balance at some point this year, OPEC Secretary-General Mohammad Barkindo said in a Bloomberg Television interview in Davos, Switzerland.

Prices have risen amid “incredible reductions in inventories” at the massive Cushing hub in northeast Oklahoma, Thomas Finlon, director of Energy Analytics Group LLC in Wellington, Florida, said by telephone. “Backwardation is looking mighty solid right now.”