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Why were the priests anointed with oil?

Take the anointing oil and anoint him by pouring it on his head. Exodus 29:7
            Anointing occurs in a number of places in the Bible—with priests and individuals who become leaders, such as David who was anointed three times before fully established as king of Israel.
            The word “anoint” means to smear or cover.  The process of pouring oil over someone means to cover them, symbolic of God’s favor and purpose covering them and their lives.  It ceremoniously means to set them apart.  The priests were anointed because they were to be holy and called to do God’s work.  The oil dedicated or separated them for that process.