Oil prices hit their highest levels since 2014 on Wednesday due to ongoing production cuts led by OPEC as well as healthy demand, although analysts cautioned that markets may be overheating.
A broad global market rally, including stocks, has also been fuelling investment into crude oil futures.
U.S. West Texas Intermediate (WTI) crude futures were at $63.47 a barrel at 0405 GMT – 51 cents, or 0.81 percent, above their last settlement. They marked a December-2014 high of $63.53 a barrel in early trading.
Brent crude futures were at $69.19 a barrel, 37 cents, or 0.54 percent, above their last close.
Brent touched $69.29 in late Tuesday trading, its strongest since an intra-day spike in May 2015 and, before that, in December 2014.
“The extension of the OPEC agreement … and declining inventories are all helping to drive the price higher,” said an analyst.
Crude oil stocks fell by 11.190 million barrels last week, the American Petroleum Institute (API) said in its estimates on Tuesday, more than expected as gasoline inventories rose by 4.338 million barrels and distillate stocks gained 4.685 million barrels.
Analysts estimated that crude stocks fell by 3.89 million barrels, while distillate inventories rose by 1.464 million barrels and gasoline stocks gained by 2.652 million barrels.
In an effort to prop up prices, the Organization of the Petroleum Exporting Countries (OPEC) together with Russia and a group of other producers last November extended an output cut deal that was due to expire in March this year to cover all of 2018.
The cuts, which have mostly targeted Europe and North America, were aimed at reducing a global supply overhang that had dogged oil markets since 2014.
The American Petroleum Institute said late on Tuesday that crude inventories fell by 11.2 million barrels in the week to Jan. 5, to 416.6 million barrels.