25/01/2018 12:19 AST
Oil prices shot to fresh three-year highs on Thursday, with Brent climbing atop $71 a barrel after the market saw another drop in U.S. crude inventory and the dollar continued to sell off.
March West Texas Intermediate crude CLH8, +0.81% rose 67 cents, or 1%, to $66.29 a barrel, knocking out the three-year high the contract saw at Wednesday’s close, when it gained 1.8% to settle at $65.61 a barrel.
Brent for March LCOH8, +0.45% rose 50 cents, or 0.7%, to $71.03 a barrel, the highest since early December 2014. The contract finished at $70.53 a barrel, a gain of 0.8%, on Wednesday, also a Dec. 2014 high.
Continuing a string of declines, the EIA reported Wednesday that U.S. crude supplies fell 1.1 million barrels for the week ended Jan. 19. However, the data also showed total domestic crude production, climbed by 128,000 barrels a day to 9.878 million barrels a day, which some analysts said could hamper crude’s march higher.
A weaker dollar was also contributing to crude gains. The ICE Dollar Index DXY, -0.07% hit a three-year low on Wednesday after U.S. Treasury Secretary Steven Mnuchin said a weaker greenback was good for trade. On Thursday, the dollar index dropped to a fresh three-year low below 89, last trading at 88.906. A weak dollar can make assets like crude look more attractive, because they become cheaper for other currency holders.
February natural-gas futures NGG18, +1.00% pulled back from gains that have seen the contract soar nearly 10% this week. The contract eased 0.6% to $3.49 per million British thermal units after a near 2% climb on Wednesday, when it reached its highest settlement since Dec. 30, 2016.
Natural gas prices have been climbing on weather forecasts that again call for frigid temperatures in parts of the U.S., which could prompt further inventory declines. But some analysts said calls for milder weather next week could keep those prices from climbing too high.
MarketWath
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