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Brent crude futures rose 45 cents, or 0.5%, to $85.91 a barrel
at 1215 GMT. West Texas Intermediate (WTI) U.S. crude futures
rose 62 cents, or 0.8%, to $79.49 a barrel.
Tamer U.S. rate hike expectations helped lower the dollar index,
which supported oil prices as a weaker greenback makes the
commodity cheaper for buyers holding other currencies, according
to Stephen Brennock, analyst at PVM.
The Federal Reserve is expected to deliver its decision at 1900
GMT.
Meanwhile, ministers of the Organization of the Petroleum
Exporting Countries and allies including Russia are expected to
stick with existing output targets at a virtual meeting
scheduled for 1300 GMT.
OPEC's oil output fell in January, as Iraqi exports dropped and
Nigeria's output did not recover, with the 10 OPEC members
pumping 920,000 barrels per day (bpd) below their targeted
volumes under the OPEC+ agreement, a Reuters survey found.
The shortfall was bigger than the deficit of 780,000 bpd in
December.
Capping gains, data from the American Petroleum Institute
industry group showed U.S. crude stocks rose about 6.3 million
barrels, more than expected, in the week ended Jan. 27,
according to market sources. [API/S]
Government stockpile data is due at 1530 GMT. [EIA/S]
"Commercial storage in North America is ample," said Norbert
Ruecker, economist at the bank Julius Baer.
"The improved market mood has lifted prices of late, but this
support should remain temporary. We see lower prices longer
term, in line with the futures market’s expectations."
WTI is trading in contango, which means front-month delivery
contracts are trading higher than later deliveries, indicating
current oversupply.
Brent is in a shallow backwardation, the opposite market
structure.
(Additional reporting by Mohi Narayan in New Delhi and Sonali
Paul in Melbourne; editing by Jason Neely)
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