Oil rose over a dollar on Wednesday, bolstered by hopes of a US debt deal and by tightening crude stocks in the world's largest oil consumer.
US crude, rose USD 1.08 to USD 98.58 a barrel, having reached a high of USD 98.73.
Brent crude climbed USD 1.20 to USD 118.26 a barrel by 1028 GMT after touching a peak of USD 118.45, adding to gains of more than a dollar in the previous session.
"The outlook for US inventories data is pushing prices higher after a big draw in crude shown by the API, which has shifted the outlook for EIA data," said Andy Sommer, energy analyst at EGL in Dietikon, Switzerland.
Industry group American Petroleum Institute on Tuesday reported a 5.2 million barrel drop in domestic crude stocks, surpassing expectations for a 1.7 million barrel fall, as refinery runs rose.
The US Energy Information Administration will issue its own weekly data later on Wednesday.
Stockpiles were forecast down for a seventh straight week due to higher refinery usage and a decline in imports, an extended Reuters poll showed on Tuesday ahead of weekly inventory reports.
All but one of 14 analysts polled projected a drawdown in crude, with the average forecast at 1.7 million barrels for the week to July 15.
Sommer added that investors were now positioned for a big fall in stocks, which would make oil prices vulnerable if the data, which can swing sharply due to its weekly frequency, fails to meet forecasts for a big drop.
However some analysts were still very bullish on a longer term basis.
Bank of America Merrill Lynch said Brent crude could spike as high as USD 175 per barrel next year if the global oil market stays tight and raised its forecast for Brent USD 8 to an average of USD 102 a barrel for the fourth quarter of 2011.
