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Oil Price RalliesTowards $80, Highest In 3yrs

Oil prices Thursday rallied to three-year high, boosted by a record 10th straight weekly decline in U.S. crude inventories.
Prices hit their highest since December, 2014, pushed up after U.S. crude inventories posted a 10th straight week of declines and as the dollar continued to weaken.
International benchmark Brent futures were inching towards $71 per barrel, 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. 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 the Organisation of the Petroleum Exporting Countries (OPEC) and Russia, which started last year and are set to last throughout 2018.
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 on Wednesday.
That’s the lowest seasonal level since 2015 and below the U.S. five-year average around 420 million barrels.
In foreign exchange markets, the U.S. 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.
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.

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