The photo has been used for illustrative purposes.

Oil prices reached their highest in more than two years on Tuesday, buoyed by expectations demand will recover rapidly in the second half of 2021.

Brent crude rose 77 cents, or 1.1%, to $73.63 a barrel by 11:19am. The global benchmark during the session hit $73.90 a barrel, its highest since April 2019.

US oil rose 86 cents, or 1.2%, to $71.74 a barrel. It hit a session high of $72.03 a barrel, its highest since October 2018.

The head of trading house Vitol sees oil prices moving between $70-$80 a barrel this year as the organisation of the Petroleum Exporting Countries and allied producers (Opec+) are predicted to maintain supply discipline.

“We have had those stock draws for a couple months, the market is heading in the right direction,” Russell Hardy told the FT Commodities Global Summit.

Industry data is due at 4:30pm on Tuesday, followed by official figures on Wednesday morning. Investors and traders are also watching the outcome of a two-day US Federal Reserve meeting that starts on Tuesday for signals on when it will start to scale back monetary stimulus.

The Fed is getting ready to debate how and when to start tapering a massive asset-purchase programme that helped to support the US economy during the pandemic.

Stocks were moderately lower in morning trading  on Tuesday as investors reacted negatively to a report that once again showed inflation creeping higher as well as data that showed Americans slowed their spending last month. The S&P 500 was down 0.2% as of 10:10 am Eastern. The Dow Jones Industrial Average was down 0.4% and the Nasdaq Composite was down 0.4% as well.

US retail sales drop: US retail sales dropped more than expected in May, with spending rotating back to services from goods as vaccinations allow Americans to travel and engage in other activities that had been restricted by the COVID-19 pandemic.

Other data on Tuesday showed an acceleration in producer prices last month as supply chains struggle to meet demand that is being unleashed by the reopening of the economy. In addition to vaccinations, demand is also being fired up by trillions of dollars from the government and record-low interest rates.

Retail sales fell 1.3% last month, the Commerce Department said. Data for April was revised higher to show sales increasing 0.9% instead of being unchanged as previously reported. Economists polled by Reuters had forecast retail sales declining 0.8%. Retail sales surged 28.1% on a year-on-year basis.