Oil rises as markets focus on tight supplies

Oil prices rose in early trading on Wednesday, as markets focused on tight supplies ahead of winter and a “soft landing” for the US economy.

By 0015 GMT, Brent crude futures rose 33 cents, or 0.4 percent, to $94.29 per barrel, while US West Texas Intermediate crude futures rose 31 cents, or 0.3 percent, to $90.70.

Industry data released on Tuesday showed that US crude oil inventories rose last week by about 1.6 million barrels, compared to analysts’ expectations of a decline of approximately 300,000 barrels.

However, markets continued to be concerned about US crude inventories at the main storage hub in Cushing, Oklahoma, falling below minimum operating levels.

Further cuts in Cushing, the delivery point for US crude futures, could impose new upward pressure on oil markets because they will increase supply scarcity resulting from supply cuts undertaken by the Organization of the Petroleum Exporting Countries and its allies, the so-called OPEC+.

US government data on oil inventories is expected to be released at 10:30 am (1430 GMT).

Meanwhile, Federal Reserve Chairman Neel Kashkari said in Minneapolis on Tuesday that a “soft landing” for the world’s largest economy is the most likely possibility.

But he also stressed that there was a 40 percent chance that interest rates would be needed “meaningfully” to overcome inflation.

Higher interest rates increase borrowing costs, which may slow economic growth and reduce demand for oil.