WTI retreats from multi-year peaks, goes into consolidation phase near $66

• WTI renews best level in more than three years at $66.66 on Thursday.
• USD weakness provides extra fuel.

Crude oil prices extended their latest rally on Thursday with the barrel of West Texas Intermediate touching its highest level since December of 2014 at $66.66 during the early trading hours of the European session.

Speaking at a panel at the World Economic Forum in Davos yesterday, Saudi Arabia's energy minister Khalid al-Falih said that OPEC and its non-OPEC allies could exit from the output cut deal in the early part of 2019 in a smooth and gradual manner, signaling that a new deal in form of an extension to the current agreement could be in place.

In addition to investors pricing the possibility of curbed oil production lasting longer than anticipated, a broad-based USD weakness continues to help commodities preserve their bullish momentum. "The depreciation of the U.S. dollar is also allowing oil prices to make further gains. Almost every commodity class is being driven up by this extended dollar fall," Commerzbank analyst Carsten Fritsch explained Reuters.

With markets' focus staying on the USD sell-off and comments from OPEC officials, this week's API data, which showed a surprise build in crude oil stocks in the U.S., and the EIA report, which revealed a smaller-than-expected draw in oil inventories, failed to have the usual negative impact on crude oil prices.