Oil prices rose for the fourth day in a row on Thursday, bolstered by steadily declining stockpiles and a tumbling U.S. dollar.
Continue Reading Below
Light, sweet crude for March delivery gained 42 cents, or 0.6%, to $66.03 a barrel on the New York Mercantile Exchange, on track for the highest settle value since December 2014. Brent, the global benchmark, rose 28 cents, or 0.4%, to $70.81 a barrel.
Prices have rallied this year on signs of a tightening global market, as the Organization of the Petroleum Exporting Countries has worked to alleviate a worldwide glut. Further boosting investor optimism, U.S. inventories have fallen to the lowest level since February 2015.
On Wednesday, the U.S. Energy Information Administration reported that crude stockpiles fell by 1.1 million barrels in the week ended Jan. 19, marking the tenth consecutive week of declines.
Crude sitting in storage at delivery and pricing hub Cushing, Okla. has also fallen in recent weeks, lifting oil prices.
"There's no advantage to putting crude oil in storage, especially in Cushing right now," said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. "That alone would be enough reason for a sizable rally right here."
Continue Reading Below
Traders said a weaker U.S. dollar helped support crude on Thursday, as dollar-denominated commodities like oil became cheaper for foreign buyers. The WSJ Dollar Index fell to the lowest level in three years on Wednesday, after U.S. Treasury Secretary Steven Mnuchin said Wednesday that "a weaker dollar is good for trade."
"Whilst the weak dollar is undoubtedly supportive for oil prices, bulls really started to attack from left, right and center after the EIA published its latest inventory report, " said Tamas Varga, an analyst at brokerage PVM Oil Associates Ltd.
Meanwhile, Saudi Arabia's oil minister and Russia's energy minister sounded unconcerned about rising output from U.S. shale, in remarks this week at the World Economic Forum in Davos, Switzerland.
OPEC along with several producers outside the oil cartel, including Russia, agreed late last year to extend an accord to hold back crude output by 1.8 million barrels a day through the end of this year. The deal, first struck in late 2016, was meant to rein a global supply glut that has weighed on prices for over three years.
Saudi Arabia -- the de facto leader of OPEC -- indicated earlier in the week that the participants could continue to hold back production beyond this year.
But analysts have cited risks from growing supply from U.S. shale producers that are quick to increase output when oil prices rise. According to the EIA report, U.S. production rose by 128,000 barrels last week to 9.878 million barrels per day, a new record.
Stockpiles of fuel also increased last week, with gasoline inventories up 3.1 million barrels and distillates up 600,000 barrels.
Gasoline futures rose 0.3% to $1.9229 a gallon and diesel futures advanced 0.5% to $2.1171 a gallon.
Write to Stephanie Yang at email@example.com and Christopher Alessi at firstname.lastname@example.org
(END) Dow Jones Newswires
January 25, 2018 12:20 ET (17:20 GMT)