U.S. crude inventories fell by a more-than-expected 1.8 million barrels last week, American Petroleum Institute data showed on Tuesday. The focus is now on whether the government's supply report on Wednesday confirms the decline.

"Should it confirm that U.S. crude stocks did indeed fall for what would only be the second time this year, it will mark the start of a sustained tightening in U.S. crude supplies," said Stephen Brennock of oil broker PVM.

Global benchmark Brent crude had risen 48 cents to $54.65 a barrel by 1000 GMT. It reached $54.91 intraday, the highest since March 8. U.S. crude was also up 48 cents at $51.52.

Oil also gained after an outage at the 180,000-barrels-per-day Buzzard field in the North Sea. Buzzard is the largest field contributing to Forties, the most important of the four crude streams underpinning Brent.

"This outage more than offsets the increase in oil production in Libya," said Carsten Fritsch of Commerzbank, referring to the recovery in output at Libya's Sharara field.

"Now, it seems that crude oil stocks have peaked at least and are starting to decline," he added.

An output cut from Jan. 1 led by the Organization of the Petroleum Exporting Countries has helped Brent recover from a 12-year low near $27 last year, although rising U.S. output and stubbornly high stocks have limited the rally.

OPEC and non-OPEC producers, including Russia, together cut supply by about 1.8 million bpd for six months until June, and are considering whether to extend the agreement.