Bullish factors supporting higher prices are OPEC's efforts to tighten markets, strong demand in Asia and the reimposition of sanctions against Iran.
Oil has surged more than 7% this month on concern geopolitical risk in the energy-rich Middle East is intensifying, with Trump set to decide whether to extend Iran's sanctions relief on May 12.
Brent, the worldwide benchmark, surged as high as $75.27 a barrel overnight - a level not seen since 2014. Currently, nationwide gasoline prices average $2.76 per gallon, and will likely rise in the coming weeks ahead of Memorial Day weekend when summer driving season begins.
"Crude oil prices see-sawed lower overnight, after the previous days' climb to its 2014 highs", OCBC Commodity economist Barnabas Gan said. To the extent that Opec and other oil exporting nations agreed to reduce output to support the oil price in 2017, an agreement that will expire by the end of 2018 unless extended, he is right.
Commodity funds are now attracting investments at the fastest pace in more than a year as geopolitical concerns are boosting oil prices to the highest levels since 2014.
With the global economy on a cyclical upswing, how the battle between the price and income effects on oil consumption plays out is crucial, analysts said. "No good and will not be accepted!"
"EIA should show a bigger crude oil draw, " he added.
WTI's discount to Brent was as wide as $6.27 Tuesday, its largest since January 5, on rising USA production.
The American Petroleum Institute (API) reported a surprise build of 1.099 million barrels of United States crude oil inventories for the week ending April 20, contrary to analyst expectations that this week would see a draw in crude oil inventories of 2.648 million barrels.
"As the direction of oil is very hard to predict, it's difficult for managers in this sector to deliver consistent performance, " said Michael Gerber, head of at investment adviser Fundana SA's fund of funds, as cited by Bloomberg.
It's clear that the global oil markets have shifted significantly from two years ago, when prices fell below $30 per barrel. The criticism from Donald Trump, who tweeted that the OPEC was artificially inflating the prices, will not change the situation.
A news report this week suggested Saudi Arabia would not mind seeing prices in the $80 to $100 a barrel range, up from around $68 now.