Investing.com - U.S. oil futures edged higher on Wednesday, amid speculation weekly supply data due later in the day will show the third consecutive drop in U.S. oil inventories.
Investors also awaited the outcome of the Federal Reserve's policy meeting later in the day amid ongoing speculation over whether the central bank will announce any reduction to its stimulus program.
On the New York Mercantile Exchange, West Texas Intermediate crude for delivery in February traded at USD97.82 a barrel during European morning trade, up 0.35%. New York-traded oil futures held in a range between USD97.37 a barrel and USD97.83 a barrel.
Nymex oil futures were likely to find support at USD96.27 a barrel, the low from December 13 and resistance at USD98.17 a barrel, the high from December 12.
The February contract ended down 0.31% on Tuesday to settle at USD97.47 a barrel.
Market players looked ahead to data from the U.S. government on oil and fuel supplies later in the day to gauge the strength of demand from the world's largest oil consumer.
Wednesday's government report was expected to show that crude oil stockpiles fell by 2.3 million barrels last week, while gasoline inventories were forecast to increase by 1.85 million barrels.
After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories fell by 2.5 million barrels in the week ended December 13, compared to expectations for a decline of 4 million barrels.
The data also showed that gasoline stockpiles increased by 481,000 barrels, below expectations for a gain of 1.4 million barrels.
Meanwhile, investors remained wary ahead of the outcome of the Fed's final policy meeting of the year, with some expecting the central bank to announce a small reduction in the pace of its USD85 billion-a-month asset purchase program.
However, many believe that policymakers will wait until early next year to start rolling back stimulus, despite recent indications the U.S. economic recovery is deepening.
The Fed's stimulus program is viewed by many investors as a key driver in boosting the price of commodities as it tends to depress the value of the dollar.
Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for February delivery inched up 0.05% to trade at USD108.49 a barrel, while the spread between the Brent and U.S. crude contracts stood at USD10.67 a barrel.
