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In a medium glass or enamel lined sauce pan over high heat, combine oil, peppers, garlic, onion and salt; saute for 4 minutes.
Add the water and cook for 20 minutes, stirring often.
Remove from heat and allow mixture to cool to room temperature.
Transfer the mixture to a food processor and puree until smooth.
With the processor running, slowly add the vinegar.
Pour into a sterilized jar with a tight lid. This sauce will keep for 6 months when stored in the refrigerator.