Brent crude rose 78 cents, or 1.1%, at $73.64 a barrel by 1311 GMT, the highest since late April 2019. US oil gained 88 cents, or 1.2%, to $71.76 a barrel, a 32-month high.
“With supply growth lagging demand growth in the near term, faster falling oil inventories are supporting oil prices,” UBS analyst Giovanni Staunovo said.
He said comments on Tuesday from some of the world’s top oil traders added to the bullish mood.
The head of trading house Vitol sees oil prices moving between $70-$80 a barrel this year as the Organization of the Petroleum Exporting Countries and allied producers (OPEC+) are predicted to maintain supply discipline.
“We have had those stock draws for a couple months, the market is heading in the right direction,” Russell Hardy told the FT Commodities Global Summit.
CEO of Trafigura Jeremy Weir told the same event there was a good chance prices could reach $100 a barrel because of falling reserves before the world reaches peak oil demand.
OPEC+ producers have been gradually relaxing record output curbs in recent months.
Analysts polled by Reuters expect US crude stocks to have fallen for a fourth week in a row by about 3 million barrels. Official figures from the Energy Information Administration are due to be released on Wednesday.
Investors and traders are also watching the outcome of a two-day US Federal Reserve meeting that starts later on Tuesday for signals on when it will start to scale back monetary stimulus.
The Fed is getting ready to debate how and when to start tapering a massive asset-purchase programme that helped to support the US economy during the pandemic.
