Investing.com - An upbeat report on U.S. oil stockpiles coupled with a weaker dollar ahead of the Federal Reserve's monetary policy statement due out later sent crude futures gaining on Wednesday.
A weaker greenback makes oil and more attractive commodity in dollar-denominated exchanges, especially in the eyes of investors holding other currencies.
In the New York Mercantile Exchange, West Texas Intermediate crude oil futures for delivery in December traded up 1.40% at $82.56 a barrel during U.S. trading, up from a session low of $81.31 a barrel and off a high of $82.87 a barrel.
The December contract settled up 0.52% at $81.42 a barrel on Tuesday.
Support for the commodity was seen at $79.44 a barrel, Monday's low, and resistance at $83.26 a barrel, the high from Oct. 21.
The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories rose by 2.1 million barrels in the week ending Oct. 24, below expectations for a gain of 3.4 million barrels, which sparked a rally in oil markets by easing concerns the world is facing a hefty supply glut.
Total U.S. crude oil inventories stood at 379.7 million barrels as of last week.
The report also showed that total motor gasoline inventories decreased by 1.2 million barrels, compared to forecasts for a decline of 1.0 million barrels, while distillate stockpiles fell by 5.3 million barrels.
A weaker dollar supported oil in midday U.S. trading as well.
Many investors were betting that the Federal Reserve later Wednesday will announce plans to close its bond-buying program, which stands at $15 billion in Treasury and mortgage debt purchased each month.
The quantitative easing program aims to spur recovery by suppressing long-term borrowing costs with the hope companies raise capital to invest and hire, weakening the dollar as a side effect.
Still, an end to quantitative easing has largely been priced into trading, though weeks of hit-or-miss data have many investors uncertain as to when the Fed will hike is fed funds rate in 2015.
By Wednesday trading, many were expecting the U.S. central bank to reassure markets that interest rates will remain on hold for some time to come to make sure cooling European and Chinese economies don't drag on U.S. recovery, which softened the greenback against its peers.
Separately, on the ICE Futures Exchange in London, Brent oil futures for December delivery were up 1.77% at US$87.53 a barrel, while the spread between Brent and U.S. crude contracts stood at $4.97.