By Yuka Obayashi

TOKYO (Reuters – Oil prices rose on Wednesday in line with last week’s seven year highs. Data showing a drop in stocks had underlined strong demand. However, investors remained cautious before an OPEC+ Meeting due to take place later that day.

After easing 10cs Tuesday, the price of a barrel rose 36 cents or 0.4% to $89.52 by 0123 GMT.

U.S. West Texas Intermediate crude oil was 0.4% higher at $88.58 per barrel after gaining 5 cents last day.

This year, oil prices rose by 15% due to tight supplies worldwide and geopolitical tensions between Eastern Europe and Middle East. Brent reached $91.70, while U.S. crude hit $88.84 on Friday.

Satoru Yoshida from Rakuten Securities, said that while the U.S. crude inventories dropped, it provided some support. However, an increase in gasoline stocks partly offsets bullish sentiment.

He stated that OPEC+ was likely to keep its policy the same, which would mean a shortage of oil and an uptrend in oil prices.

U.S. crude oil stocks decreased by 1.6 Million barrels in the week ending Jan. 28. Analysts had expected an increase of 1.5million barrels according to sources who cited American Petroleum Institute data on Tuesday.

However, gasoline inventories rose to 5.8 million barrels. This is higher than analysts expected for an increase of 1.6 million.

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The Organization of the Petroleum Exporting Countries (OPEC+) and their allies will likely continue with existing policies of moderate production increases on Wednesday. Five producers group sources stated that this is despite the fact it anticipates higher demand and oil prices trading near seven-year highs.

Goldman Sachs, NYSE:), said that the possibility of an oil market rally triggering a more rapid ramp-up.

Sources claim that OPEC+’s technical panel did not consider a rate increase of more than the 40,000 barrels per daily expected from March.

Oil prices were also affected by tensions between Russia, the West and China. Russia, which is second in oil production, and the West are at odds over Ukraine. There have been fears of disruption to Europe’s energy supply.

Russian President Vladimir Putin accused West of creating an environment that would lure them into war. He also accused Russia of ignoring its security concerns regarding Ukraine.