Oil prices hit their highest on Thursday since December 2014; it pushed up after U.S. crude inventories posted a 10th straight week of declines and as the dollar continued to weaken.
Again Oil prices rallied to a three-year high, boosted by a record 10th straight weekly decline in U.S. crude inventories. International benchmark Brent futures were nudging 71 dollars per barrel both crude benchmarks are up by almost 60 percent since the middle of last year.
U.S. West Texas Intermediate (WTI) crude futures climbed to 66.22 dollars per barrel in early trading, also the highest level since early December 2014. Price support has also been coming from supply restrictions led by a group of producers around the Organisation of the Petroleum Exporting Countries (OPEC) and Russia, which started last year and are set to last throughout 2018.
Report say “The Saudi’s and Russians have continued to work together to talk the oil market higher and last night, the countries’ two oil ministers reiterate, they were working together on other longer-term projects as well,” Greg McKenna, chief market strategist at futures brokerage AxiTrader said “That, the USD fall, along with another inventory draw combined to drive crude up,”
In foreign exchange markets, the U.S. dollar hit its lowest level since December 2014 against a basket of other leading currencies.
Analysts say a weakening dollar often results in financial traders taking investment out of currency markets and into commodity futures like crude,
also rising oil prices would likely start to have an inflationary effect.
Looming over the generally bullish oil market has been U.S. oil production, which is edging ever more closely towards 10 million barrels per day (bpd), hitting 9.88 million bpd last week. U.S. output has grown by more than 17 percent since mid-2016 and is now on par with that of top exporter Saudi Arabia.