08:57 AM EDT, 06/26/2024 (MT Newswires) -- Oil prices rose early on Wednesday, even as a report showed U.S. oil inventories rose last week, on expectations that demand is on the rise.

West Texas Intermediate crude oil for August delivery was last seen up US$0.45 to US$81.28 per barrel, while August Brent crude, the global benchmark, was up US$0.41 to US$85.42 per barrel.

In its weekly survey, the American Petroleum Institute on Tuesday reported U.S. oil inventories rose by 0.91-million barrels last week, while the consensus estimate called for a three-million barrel draw on stocks. The Energy Information Administration will release official data later on Wednesday morning.

Despite the API data. expectations summer demand is strong and rising amid OPEC+ production cuts remains the dominant theme in the market.

"The ubiquitous view is that demand will increase during the summer and with OPEC+ cuts fully in place until October global and OECD stocks ought to deplete. Thus, convincing stock draws in the US would go a long way to bolster this optimism. Last night's API data was inauspicious. Both crude oil and gasoline went against forecasts and built, and distillate inventories recorded a surprise plunge. If the data set is confirmed by the EIA this afternoon the retracement might just last longer than anticipated," PVM Oil Associates noted.

A rising dollar is checking oil prices, with the ICE dollar index last seen up 0.35 points to 105.96, the highest since April 30, ahead of the release of the Personal Consumption Expenditures Index (PCE) on Friday, the Federal Reserve's preferred inflation measure.

However geopolitical tension is offering support, on continuing violence in the Middle East with Isreael continuing it war on Hamas in Gaza and Houthi militants attacking Red Sea shipping.