Oil hits $71 for first time since 2014 on reduced U.S crude inventories, tighter cuts

Oil prices hit a new high of $71 per barrel Thursday for the first time since 2014, supported by increasing decline in U.S. crude inventories, a weaker U.S. dollar and OPEC-led supply cuts, according to Reuters report.

Oil prices, boosted by a record 10th straight weekly decline in U.S. crude inventories spiked to a three-year high.

Brent crude LCOc1, the international oil benchmark, hit $71.20 a barrel, up 28 cents early Thursday, the highest since early December 2014.

U.S. crude CLc1 climbed to $66.44, also the highest since early December 2014, before dipping to $66.05, up 44 cents.

U.S. crude inventories fell 1.1 million barrels in the week to Jan. 19, to 411.58 million barrels, the Energy Information Administration (EIA) said Wednesday.

“The continuous fall in U.S. oil inventories and the prolonged weakness in the U.S. dollar have done the trick,” said Tamas Varga, an energy analyst with PVM.

Also, the supply cuts led by OPEC and its allies have helped in rallying the crude price which started last year and according to Khalid A. Al-Falihthe, energy minister of Saudi Arabia, is expected to last throughout 2018.

“The Saudi’s and Russians continue to work together to take 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 AxiTrader.

In foreign exchange markets, the U.S. dollar hit its lowest level since

December 2014 against a basket of other leading currencies, and therefore pushing oil prices higher prices.