Crude oil prices on Thursday hit their highest since December 2014 after United States crude inventories posted a 10th straight week of declines and as the dollar continues to weaken.
International benchmark Brent futures settled at $71.12, above the three-year high of $70.37 reached on January 15, 2018.
US West Texas Intermediate (WTI) crude futures climbed to 66.22 dollars per barrel in early trading, also the highest level since early December 2014.
WTI first reached its highest since December 2014 on January 16 at $64.89.
Healthy world economic growth prospects and expectations for continued production curbs by the Organisation of Petroleum Exporting Countries (OPEC), Russia and their allies have continued to boost oil prices.
The International Monetary Fund on Monday revised upward its forecast for world economic growth, which could help demand for petroleum products.
This is coming as OPEC, Russia and other producers continue their supply-cut agreement which began in January 2017 and is due to run until the end of 2018.
OPEC’s main objective for the cuts is to eliminate a global surplus in oil stocks and rebalance the market.
There is some expectation that OPEC will let the agreement expire at the end of 2018, but major producers have not yet suggested that this is in the offing.
The sharp plunge in Venezuelan production is offsetting increases from the United States, which is on the cusp of breaking its all-time production record of 10.04 million barrels per day.
Venezuela’s output fell to a meager 2 million bpd in 2017, far short of expectations for 2.5 million bpd, and the International Energy Agency said it could keep declining in 2018.
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 oil.
Oil traders had said the prices were unlikely to fall far due to risks to supply disruptions.
In Nigeria, the militant group Niger Delta Avengers (NDA) had threatened to launch attacks on the country’s oil sector in the next few days.
The militant group had warned the Nigerian government to brace up for another round of attacks that it would soon unleash on oil and gas facilities in the country.
The group had also stated that with the recent killings across the country, the time was ripe for the restructuring of the country.
Reuters quoted analysts as saying that rising oil prices would likely start to have an inflationary effect.
Looming over the generally bullish oil market has been US oil production, which is edging ever more closely towards 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
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