Brent oil rose by more than $1 a barrel on Wednesday but U.S. oil ended virtually flat on the day, as the Federal Reserve's hinting at a taper timetable squelched a boost from U.S. oil inventories that came in less than expected.
In addition, optimism about nuclear talks with Iran kept prices in check.
related investing news
Fed officials pointed to "coming months"when a tapering could occur. According to minutes from the meeting, Open Markets Committee members looked to economic improvement that "would prove consistent with the Committee's outlook for ongoing improvement in labor market conditions and would thus warrant trimming the pace of purchases in coming months." That would drain some of the impetus from commodities markets, which have benefited from Fed stimulus.
Brent crude for January traded above $108, up more than $1, after posting its biggest daily fall in nearly two weeks on Tuesday as Libya resumed some oil exports.
The U.S. crude contract for December ended down one cent at $93.33 a barrel. Both U.S. crude and Brent began a new leg higher after the Department of Energy showed a smaller-than-expected build in oil inventories last week. Oil inventories rose 375,000 barrels last week, compared with analysts' forecast of a 900,000-barrel build.
Data from the U.S. Energy Information Administration showed that crude stocks rose by 375,000 barrels, well below the forecast for a 900,000 barrel increase. Distillate stocks fell much more sharply than expected and demand over the past four weeks was up 8.8 percent from a year ago, and at its highest level since November 2011.
For more information on commodities, please click here.