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The
American Petroleum Institute reported U.S. crude inventories
fell 8.5 million barrels, two market sources said, more than
analysts forecast. [API/S] Official Energy Information
Administration figures are out at 1430 GMT. [EIA/S]
Brent crude was up 21 cents, or 0.3%, at $74.20 a barrel by 1000
GMT, and earlier reached $74.73, the highest since April 2019.
U.S. crude gained 18 cents, or 0.3%, to $72.30 and hit $72.83,
the highest since October 2018.
"Demand growth is outpacing supply and will continue to do so
over the coming months," said Stephen Brennock of oil broker PVM.
Brent has risen 44% this year, supported by supply cuts led by
the Organization of the Petroleum Exporting Countries and
allies, known as OPEC+, and a demand recovery expected to gather
pace in the second half. [OPEC/M] [IEA/M]
Despite some easing of last year's record output cuts made when
the pandemic took hold, OPEC+ is still withholding millions of
barrels of daily supply from the market.
"Even non-energy traders are placing bets that oil prices will
continue to rise," said Edward Moya, senior market analyst at
brokerage OANDA.
Executives from major oil traders said on Tuesday they expected
prices to remain above $70 and demand to return to pre-pandemic
levels in the second half of 2022.
At the same time, the prospect of an imminent rise in Iranian
oil exports looks less likely, analysts said. Indirect talks
between Tehran and Washington on resuming the 2015 nuclear
accord resumed in Vienna on Saturday.
"Ongoing efforts to revive the Iranian nuclear deal have so far
failed to bear any fruits," PVM's Brennock said.
(Additional reporting by Aaron Sheldrick; editing by Jason
Neely)
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