By Barani Krishnan

Investing.com — Oil prices edged up Wednesday as a result of a decrease in crude stockpiles reported by the U.S. government, which was offset by an OPEC+ production rise.

The benchmark price for U.S. crude oil settled at $88.32 per bar, up 0.1% or 12 cents.

The London-traded oil benchmark rose 0.3% to $89.42, a rise of 26 cents.

Oil markets entered the week on a 6-week rally, fueled by geopolitical concerns over the Russia-Ukraine conflict, and the of oil producers alliance OPEC+ — which never fails to provide its own drama to keep crude prices on the boil.

OPEC+ approved an additional 400,000 barrels of production per day at Wednesday’s February meeting. Production will start in March. 

The global oil producers’ alliance had been increasing production by 400,000 bpd increments for months now after slashing as much as 10 million bpd in 2020, at the height of demand destruction caused by the coronavirus pandemic. 

Initially, oil prices were affected by the OPEC+ hikes. They have not been having much effect lately, despite evidence suggesting that the members of the alliance weren’t able to increase output enough due to production limitations at oilfields which were under-invested in during the pandemic.

Wednesday’s OPEC+ announcement was further diluted by the from the U.S. Energy Information Administration, or EIA. That showed that the crude build fell by 1.046 million barrels over the week ending Jan. 28. Investing.com tracked industry analysts and predicted a crude oil build of 1.525 millions barrels.

Aside from the national crude stockpile, raw oil stored at the Cushing, Oklahoma delivery point for WTI — a closely-watched industry matrix — also fell last week by 1.2 million barrels, adding to concerns that the storage hub might be getting squeezed on supplies, some traders said.

The EIA report revealed that the EIA reported that there was an increase of 2.119 million barrels in oil last week, which is higher than what had been expected. Gasoline, known as petrol outside of the United States, is America’s premier fuel product. 

Over the last month, gasoline inventories have risen as refiners appear to be optimizing fuel processing in advance of March’s scheduled maintenance. Americans tend to drive less when temperatures rise in January due to the increased winter temperature.

The EIA report revealed that the EIA reported that the draw for heating oil and diesel fell to 2.411million barrels. This was against what had been expected. The distillates can also be refined to make diesel, for buses, trains, and ships, or fuel for planes.