Oil rose for a fifth day on Wednesday, reaching $75 a barrel, its highest level since April 2019, boosted by a rebound in demand from the pandemic and a reduction in US oil stockpiles.

As per two market sources, the American Petroleum Institute stated that US oil stocks decreased by 8.5 million barrels, which was more than experts predicted. The official data from the Energy Information Administration will be released at 1430 GMT.

Brent crude was up 15 cents, or 0.2% at $74.14 a barrel by 1330 GMT, having previously touched $74.73, the highest level since April 2019. US crude fell 2 cents to $72.10 after reaching a high of $72.83 in October 2018.

“Growth of Demand is exceeding supply and would to do so in the coming months,” said PVM oil dealer Stephen Brennock.

Brent has surged 44% this year, aided by supply cutbacks led by the Organization of the Petroleum Exporting Countries and its associates, known as Opec+, and a demand rebound projected to pick up speed in the second half.

Despite some relaxation of last year's record output limits imposed whenever the pandemic hit, Opec+ continues to withhold millions of barrels of daily supplies from the market.

“Even non-energy traders are betting on higher oil prices,” said Edward Moya, senior market analyst at brokerage OANDA.

On Tuesday, executives from major oil dealers anticipated that prices would continue over $70 and demand would rebound to pre-pandemic levels in the second half of 2022.

On Wednesday, European and US stock markets marked time as investors awaited further indications from the US Federal Reserve on its stimulus initiative.

London equities rose 0.2%, trimming previous advances that had taken it to a post-pandemic high on reports of increasing UK inflation.

The pound gained after UK inflation increased to 2.1% in May, fueling expectations of rising interest rates quicker than predicted. However, the rise in the value of the pound has impacted the share prices of London-listed multinational companies that earn in dollars. Equities in Paris climbed 0.2%, while those in Frankfurt fell 0.1%.

Stocks on Wall Street shook in early trade as the US Federal Reserve wrapped up a two-day policy meeting.

“The Federal Reserve takes the centre stage later, with traders on high alert for any alterations in outlook,” said Interactive Investor's head of markets, Richard Hunter.

“The accompanying statements from the Fed meeting will be scrutinized, with additional indications of a reinforcing economy and inflationary pressures directing the next steps.”

Central bankers in the United States have said unequivocally that they will not change monetary policy until they see long-term evidence that employment and inflation have rebounded from the enormous economic harm inflicted by the Covid-19 pandemic.

Investors do not expect any alterations in interest rates or stimulus programs, but they are “excited to go through policymakers' economic projections and hear if the Fed acknowledges if it is getting closer to changing policy owing to increasing inflation pressures,” according to Briefing.com analyst Patrick O'Hare.

Markets in Asia dropped largely after a sluggish overnight lead from Wall Street, where a forecast-busting US inflation report also frightened investors just when the Fed began its current two-day meeting.

Traders have also been holding their powder dry ahead of a carefully anticipated meeting of US central bank officials, who will be debating proposals for ultra-loose policies in the face of a rapid economic rebound from last year's coronavirus-induced meltdown.

Fed stimulus and massive government expenditure have been critical in fueling the comeback and more-than-a-year stocks run, with the deployment of vaccinations and relaxation of containment rules supplying more gasoline.

However, there is concern that the assistance, which includes massive Fed bond purchases and records low-interest rates, may prove to be a double-edged sword as prices rise and the economy overheats, resulting in a rapid increase in the cost of borrowing.

Bank officials have repeatedly attempted to reassure investors that the anticipated rise in inflation would be transitory and that monetary policy will remain favorable till the economy requires it.

Traders are still sceptical, especially after the current batch of US data showed the producer price index hit 6.6% in May, exceeding estimates and also the highest level since current records began in 2010, fueling fears that the increases will be passed on to buyers.

The data on Tuesday comes only days after consumer price inflation in the US reached a 13-year high.

Oil prices continued to rise, with Brent reaching a two-year high and WTI reaching levels not seen since late 2018, owing to expectations that demand will grow further this year and next.

“This is a direct route up for oil for a month now, propelled by confidence about increasing consumption as global vaccination proceeds in earnest,” said Oversea-Chinese Banking Corp. analyst Howie Lee.