Tokyo - Oil turned higher in Asia on Thursday in volatile trading as jittery investors awaited a US Federal Reserve interest rate decision later in the day.
The US benchmark, West Texas Intermediate (WTI) for delivery in October, was up two cents to $47.17 in afternoon trade, reversing losses earlier in the day.
Brent crude for November also swung to positive territory, gaining 14 cents to $49.89.
On Wednesday, WTI surged almost six percent and Brent jumped more than four percent after the US Department of Energy revealed a 2.1 million barrel drop in inventories.
That included a 1.9 million barrel decline at the Cushing, Oklahoma trading hub, indicating stronger demand in the world's top oil consumer. The report also said US oil production fell for the sixth straight week.
Attention is now focused on Washington where the Fed will make an announcement on borrowing costs, with some analyst opinions split on whether it will begin lift-off on Thursday or wait until December.
“The market is keeping a close eye on the two-day Federal Open Market Committee meeting... as the Fed decides whether to raise interest rate for the first time in years,” said Sanjeev Gupta, head of the Asia Pacific oil and gas practice at professional services firm EY.
Fed chief Janet Yellen has said she expects an increase by the end of the year but recent turmoil in global markets caused by concerns about China's economy have made policymakers' decision-making complicated.
A rise in US interest rates tends to bolster the dollar, making dollar-priced oil more expensive for holders of weaker currencies, in turn hurting demand and prices.
AFP