Oil prices on Thursday hit their highest level since December 2014, lifted by a weak dollar and a 10th straight week of declines in US crude inventories.
Brent crude futures, the international benchmark for oil prices, were at almost $71 per barrel - $70.98 a barrel at 0232 GMT - a level not seen since early December 2014 and up 45 cents, or 0.6 per cent, from their last close.
US West Texas Intermediate (WTI) crude futures CLc1 climbed to $66.32 per barrel, also the highest level since early December 2014, and 1 per cent above their last settlement.
Both crude benchmarks are up by almost 60 per cent since the middle of last year.
Price support has also been coming from supply restrictions led by a group of producers around Opec and Russia, which started last year and are set to last throughout 2018.
“The Saudi’s and Russians continue to work together to talk the oil market higher and last night, the countries’ two oil ministers said they were working together on other longer-term projects as well,” said Greg McKenna, chief market strategist at futures brokerage AxiTrader.
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“That, and the USD fall, along with another inventory draw combined to drive [crude] up,” he added.
US crude inventories fell 1.1 million barrels in the week to January 19, to 411.58 million barrels, the Energy Information Administration (EIA) said on Wednesday.
That’s the lowest seasonal level since 2015 and below the US five-year average around 420 million barrels.
In foreign exchange markets, the US dollar hit its lowest level since December, 2014 against a basket of other leading currencies.
A weakening dollar often results in financial traders taking investment out of currency markets and into commodity futures like crude.
Analysts said that rising oil prices would likely start to have an inflationary effect.
“Higher oil prices will eventually be reflected in higher consumer prices as the costs of transport of most goods will rise,” said William O‘Loughlin, investment analyst at Australia’s Rivkin Securities.
Looming over the generally bullish oil market has been US oil production, which is edging ever more closely toward 10 million barrels per day (bpd), hitting 9.88 million bpd last week.
US output has grown by more than 17 per cent since mid-2016, and is now on par with that of top exporter Saudi Arabia.
Only Russia produces more, averaging 10.98 million bpd in 2017.
