Oil prices rose on Thursday, supported by lower US inventories and the prospect of strengthening demand, while investors awaited a decision from Opec+ producers on whether they would maintain or reduce supply cuts in the second half of the year.
Brent crude gained 94 cents, or 1.3%, to $75.56 a barrel by 9:10am GMT. US West Texas Intermediate crude was up 93 cents, or 1.3%, at $74.40.
WTI rose more than 10% in June while Brent added more than 8%, touching their highest levels since October 2018.
Analysts expect oil demand to gather pace in the second half of the year as more people are vaccinated against Covid-19 and travel restrictions are eased.
"In the first half of the year, the stage has been set for further improvement and for economic and oil demand growth," said Tamas Varga, oil analyst at London brokerage PVM Oil.
The Opec+ group of oil producers meets on Thursday to decide on a further easing of output cuts next month and could also consider extending its overall supply pact beyond April 2022, sources within the group told Reuters.
Opec and allies including Russia on Wednesday warned of "significant uncertainties" and the risk of an oil glut next year.
"Given the sharp demand increase we expect for this summer, we think the group will modestly increase production. Even so, the oil market will remain undersupplied," said UBS analyst Giovanni Staunovo, predicting that larger oil inventory declines will lift prices higher in the third quarter.
Russia would like to boost supply while Saudi Arabia wants a more cautious approach, ANZ analysts said in a note.
Outbreaks of the Delta variant of the coronavirus, meanwhile, are raising concerns that the demand recovery could falter. Renewed lockdowns and rising costs weakened momentum in Asia's factory activity in June.
In the US, crude stockpiles fell last week for the sixth straight week in response to rising demand, data from the Energy Information Administration showed.
A drop in crude inventories at Cushing, Oklahoma, the delivery point for WTI, to their lowest since March 2020 also underpinned the U.S. benchmark, squeezing its discount to Brent to its narrowest since September 2020 on Wednesday.
A Reuters poll last month showed Brent was expected to average $67.48 a barrel this year and WTI $64.54, both up from forecasts in May.