Crude's market structure keeps strengthening, suggesting the large stockpiles built up previous year are shrinking fast and will continue to do so.
Oil has rallied from historic lows hit past year as the pandemic hit demand, thanks to record output cuts by the Organization of the Petroleum Exporting Countries and allies, known as OPEC+ that the group is beginning to unwind.
The rally in headline crude prices and buying binge in physical markets comes amid a markedly tighter structure in the oil futures curve this year.
The price of oil clears the February 2020 high ($54.66) as itextends the upward trend established in November, and the OPEC Joint Ministerial Monitoring Committee (JMMC) meeting scheduled for February 3 may lead to higher oil prices as Secretary General Mohammad Barkindo insists that the group and its allies "stand ready to take any necessary actions".
Brent crude, against which Nigeria's oil is priced, was up $1.27, or 2.3 per cent, at $57.62 a barrel by 1320 GMT, its third straight day of gains and the highest levels since late February a year ago, according to Reuters.
Weekly data on US petroleum supplies will be released by the American Petroleum Institute late Tuesday, with official government data from the Energy Information Administration due Wednesday.
The Organization of the Petroleum Exporting Countries was pumping 25.75 million barrels per day (bpd) in January, the survey found, up 160,000 bpd from December.
The API also reported USA distillates and gasoline stockpiles fell by 1.62 million barrels and 240,000 barrels, respectively, last week. At the same time, the near-term impact of the pandemic on demand limits how far crude's rally can extend. Goldman Sachs said it expected the benchmark to reach $65 by July.
"A positive start", said one OPEC delegate. "To be the marginal driver in these markets like they were in silver yesterday, is a much larger question mark".
BP Plc offered more evidence that Big Oil has barely begun to heal the wounds from last year's slump, posting earnings that missed expectations mainly due to weak fuel sales and refining margins.
On Tuesday, March gasoline tacked on 1.6% to $1.6160 a gallon and March heating oil added 1.7% to $1.6746 a gallon.
-With assistance from Francine Lacqua, Tom Keene, Sherry Su and Alex Longley.