Oil prices reached their highest in more than two years on Tuesday, buoyed by expectations demand will recover rapidly in the second half of 2021.
Brent crude rose 78 cents, or 1.1%, at $73.64 a barrel by 1311 GMT, the highest since late April 2019. U.S. 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 U.S. 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 U.S. 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 U.S. economy during the pandemic.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU