Oil prices gained for a second day on Thursday after draw-downs in U.S. inventories and accelerating German economic activity bolstered confidence in the fuel demand recovery.
Doubts about the future of the 2015 Iran nuclear deal that could end U.S. sanctions on Iranian crude exports further supported prices.
Brent crude futures rose 45 cents or 0.6 per cent to $75.64 a barrel by 0847 GMT, after increasing 0.5 per cent on Wednesday.
U.S. West Texas Intermediate (WTI) crude futures climbed 40 cents or 0.54 per cent to $73.48 a barrel, after rising 0.3 per cent on Wednesday.
Both benchmarks hit their highest since October 2018 on Wednesday.
But they pared gains later in the session as energy traders locked in profit after the U.S. inventory report, Edward Moya, senior market analyst at brokerage OANDA, said in a report.
Further stoking expectations of a European fuel demand recovery, data from Germany showed the largest upward leap in retail conditions since German reunification more than three decades ago.
Across the Atlantic, U.S. crude inventories fell by 7.6 million barrels in the week to June 18 to 459.1 million barrels, their lowest since March 2020, the U.S. Energy Information Administration said.
The drawdown was nearly double analysts’ expectations in a Reuters’ poll for a 3.9 million-barrel drop.
U.S. gasoline stocks fell by 2.9 million barrels in the week, against analysts’ expectations for an 833,000-barrel rise.
“The data was encouraging since not only crude stocks, but also gasoline inventory dropped, suggesting healthy demand and tight supply,’’ said Tetsu Emori, CEO of Emori Fund Management Inc.
“Unless OPEC+ decides next week to increase output more than expected for August and later, oil prices are expected to stay at the current high range for a while,’’ he said.
The Organisation of the Petroleum Exporting Countries and its allies (OPEC+), which meet on July 1, have been discussing a further unwinding of last year’s record output cuts from August but no decision has been made, two OPEC+ sources said on Tuesday.
Brent has gained more than 45 per cent this year on supply cuts led by the OPEC+ and recovering demand as COVID-19 restrictions are eased.
Some industry executives have talked of crude returning to $100 for the first time since 2014.
Iran said on Wednesday the U.S. had agreed to remove all sanctions on Iran’s oil and shipping but Washington said “nothing is agreed until everything is agreed’’ in talks to revive the 2015 Iran nuclear deal.