Oil edged higher as a rapidly tightening market outweighed strength in the dollar and a risk-off tone in broader financial markets driven by the likelihood interest rates will stay higher for longer.

West Texas Intermediate rose toward $91 a barrel after closing up 0.8% on Tuesday. The premium for near-term US oil barrels is near the highest in more than a year after surging over the past week, indicating a supply deficit.

Oil has surged 28% since the end of June, set for its biggest quarterly gain since early 2022, on the back of supply curbs from OPEC+ leaders Saudi Arabia and Russia. The rally has rekindled talk of $100-a-barrel crude, but the gains have stalled over the past week.

The industry-funded American Petroleum Institute reported US crude stockpiles rose last week, but inventories at the storage hub in Cushing, Oklahoma, declined, according to a person familiar with the data. Official figures from the Energy Information Administration are due later Wednesday.

A rally in the US currency is making oil more expensive for many buyers. A gauge of the dollar has risen more than 5% since mid-July to the strongest level since early December.

To get Bloomberg’s Energy Daily newsletter into your inbox, click here.