Brent crude pushed towards $50 a barrel in trading in Asia overnight, boosted by supply disruptions from the escalating Canadian wildfires and armed attacks against oil facilities in Nigeria.
Wildfires burning around the oil sands hub of Fort McMurray in Alberta, Canada, have been rapidly moving north, forcing firefighters to shift their efforts to protecting existing oil facilities.
Meanwhile, in Nigeria, Africa's biggest crude producer, troops have made several arrests following the attacks on an offshore oil facility as the government on Monday moved to avert a labour strike over petrol prices.
"People are looking for any signs possible to confirm that supply is decreasing so any news of unplanned outages gets the market particularly excited," said BMI Research oil and gas analyst Peter Lee.
"A break above $50 in the next few days is very possible. In the second half of the year, oil is likely to hold between $45 to $50 a barrel."
It follows a report by US banking giant Goldman Sachs, which predicted a short-term supply deficit due to production outages, pointing to disruptions in Nigeria and Venezuela, which is deep in political crisis.
Early this morning, oil futures rallied. US West Texas Intermediate for June delivery rose 48 cents, or 1.01pc, to $48.20 a barrel. Brent North Sea oil for July delivery climbed 25 cents, or 0.51pc, to $49.22.
Prices have rebounded strongly since plunging to near 13-year lows below $30 in February. However they remain well below peaks of more than $100 a barrel reached in June 2014.
The last time Brent touched $50 was in early November. Some analysts, however, say the disruptions are temporary and believe that the market remains oversupplied.
"Admittedly, these disruptions are large enough that the rebalancing in the market expected in the second half of the year may already be happening," research firm Capital Economics said. "However, prices could quickly drop back again once at least some of this supply comes back on stream. In the meantime, global stocks remain ample."