Brent crude gained 18 cents at $67.96 per barrel by 11:08 a.m. EST and earlier in the session touched $68.29, its highest since May 2015. US commercial crude inventories fell by 7.4 million barrels (MMBbl) in the week ended December 29, to 424.46 MMBbl, according to data from the Energy Information Administration.
The American Petroleum Institute reports its weekly inventories numbers this afternoon, followed by the government's official report tomorrow morning.
OPEC officials also think the 2018 rally has been mainly driven by unrest in Iran, rather than a tighter balance between supply and demand, giving rise to concern it may not last.
"In our view, the back of the Brent and WTI curves are both still underpriced".
The market has rallied in recent weeks as investors bet on an increasingly tighter market, aided by data showing declining US stockpiles and threats to supply from major producers such as Iran and Venezuela.
Crude oil futures continued to surge Tuesday on expectations the global oil market will soon re-balance.
Oil Prices Close To Three Year Highs
A simmering power struggle in Iran has raised anxieties over the stability of Organization of Petroleum Exporting Countries' (Opec) third-largest crude producer.
There is no sign yet that OPEC is prepared to relax its supply restraint.
Traders said the gains were due to a slight decline in the number of US rigs drilling for new production.
Some analysts have said a rise in US shale oil production could discourage OPEC and Russian Federation to maintain their deal to curb supply until the end of the year for fears of losing market share.
Adding to the positive sentiment, analysts expect global economic growth to lead to higher demand for oil.
The EIA forecast that US crude oil production will average 10.3 million barrels per day in 2018 and 10.8 million barrels per day in 2019, breaking historical records for annual average production. However, Saudi Arabia, OPEC's top producer, wants to see crude above $60 to boost the valuation of its national oil company Aramco before an initial public offering of shares this year and to reduce the gap in its state budget, Saudi sources have said. "But for now, the bullish trend remains intact as prices remain above key supports".
Teacher handcuffed, removed from school board meeting in Louisiana
Records indicate Deyshia Hargrave was booked into the city jail with remaining after being forbidden and resisting an officer. Mr Payou's contract was extended for three years by the board during that meeting and includes incentives for performance.
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