Oil prices are rising slightly on Wednesday morning as the market tries to balance expectations of a tighter oil supply against fears that high interest rates could weigh on global gasoline demand, reports Reuters.

A barrel of the European reference oil, Brent, costs USD 90.86 on Wednesday morning, compared to USD 90.52 on Tuesday afternoon. At the same time, US West Texas Intermediate (WTI) oil is trading at USD 89.19, up from USD 89.06 on Tuesday afternoon.

A report on Tuesday showed that job vacancies in the US rose by the largest number in more than two years, fueling expectations that the Federal Reserve will keep interest rates high for longer.

”A resilient labor market is deemed to be providing more room for the Federal Reserve (Fed) to keep rates high for longer,” Yeap Jun Rong, market analyst at IG, tells Reuters.

Higher interest rates make it more expensive for consumers and businesses to borrow money, which can slow growth and dampen oil demand. At the same time, the US dollar has strengthened significantly, making it more expensive for holders of other currencies to buy oil.

On Wednesday, representatives of the Organization of the Petroleum Exporting Countries and its allies, OPEC+, will meet. The overwhelming expectation is that member states will maintain their current supply policies after Saudi Arabia and Russia extended their production cuts until the end of the year, writes Reuters.

Commodity market traders are keeping a close eye on supply and demand in the US. Later on Wednesday, key figures for US crude oil inventories will be published. According to Reuters, analysts estimate that crude inventories fell by 500,000 barrels last week.

(Translated using DeepL with additional editing by Kristoffer Grønbæk)