Continuous drop in US reserve and higher demand caused oil price to reach three year high on Thursday.
Crude oil rose 0.88 per cent to $69.81, the highest it has gotten since November 28, 2014 when it was sold for $70.15.
US oil inventory has maintained southward movement for eight consecutive weeks as its Oklahoma storage hub stockpiles went below the five-year average.
Phil Flynn, senior market analyst at Price Futures Group Inc. in Chicago told Bloomberg that the people were beginning to realize that glut is gone.
He explained that the global economy is on fire right now and OPEC doesn’t look like they are going to raising production anytime soon.
Oil in New York started 2018 with a bang, rallying every day but two as the Organization of Petroleum Exporting Countries and its allies continue to cut output. U.S. government data showed Wednesday that crude stockpiles tumbled for an eighth straight week.
“Oil inventories in the U.S. and the rest of the world continue to show ongoing declines,” said Giovanni Staunovo, a commodity analyst at UBS Group AG in Zurich also told Bloomberg. “Falling inventories are the main driver of the price rally” since last summer, “driven by small supply growth, and strong demand growth.”
Oil dropped to $27 in early 2016 underpinned on glut in the market after reaching $118 in February 2013.
Nigerian government used $45 per barrel of crude oil benchmark for its N8.612 trillion.