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Brent crude dipped 56 cents, or 0.6%, to $94.09 a barrel by 1027
GMT, while U.S. West Texas Intermediate (WTI) crude was down 53
cents, or 0.6%, at $87.84 per barrel.
U.S. crude oil stocks fell about 6.5 million barrels for the
week ended Oct. 28, according to market sources citing American
Petroleum Institute figures. [API/S]
At the same time, gasoline inventories fell 2.6 million barrels,
more than expected. Official data is due at 1430 GMT. [EIA/S]
China's zero-COVID policy has been a key factor in keeping a lid
on oil prices as repeated lockdowns have slowed growth and pared
oil demand in the world's second-largest economy.
An unverified note on social media said the Chinese government
was going to consider ways to relax COVID-19 rules from next
March, potentially boosting demand in the world's No.2 oil user.
Meanwhile, the dollar fell from Tuesday's highs as investors
braced for the U.S. Federal Reserve's policy decision at 1800
GMT, with many hoping for signs of a slowdown in future rate
hikes.
A weaker dollar makes oil cheaper for holders of other
currencies.
The potential disruption from the European Union embargo on
Russian oil that is set to start on Dec. 5 may also be pushing
prices higher. The ban, a reaction to Russia's invasion of
Ukraine, will be followed by a halt on oil product imports in
February.
"Despite slowing economies and China’s COVID-19 woes, the odds
are that the lack of supply will gain the upper hand over demand
concerns in the short term. Therefore, expect oil prices to
close out this year heading into triple-digit territory," PVM
analyst Stephen Brennock said.
(Additional reporting by Sonali Paul in Melbourne and Isabel Kua
in Singapore)
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