oil dipped below $87 a barrel on Wednesday after the Fed announced it would end its two-year-old bond-buying stimulus program.
The benchmark oil price rose above $87 earlier as traders anticipated that the Fed would keep U.S. interest rates low, putting pressure on the dollar.
Brent crude for December had reached as high as $87.94 a barrel ahead of the announcement. Front-month U.S. crude had topped out at $82.88 a barrel.
Prices also gained support from buoyant stock markets in Europe and Asia, after U.S. stocks ended more than 1 percent higher on Tuesday.
U.S. consumer confidence rose in October to its highest since October 2007 as views on the job market improved, according to a private-sector report released Tuesday.
OPEC Secretary General Abdullah al-Badri said Wednesday the cartel does not have a price target and that there is no need to panic at falling prices.
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"The fundamentals do not reflect this low price," Badri said at the annual Oil & Money conference in London.
He also predicted that U.S. oil production would slow, and that OPEC should be ready to produce 40 million barrels per day of crude by 2020.
OPEC now has a production target of 30 million bpd and Badri suggested last month that this should be cut to around 29.5 million bpd.
U.S. stocks of gasoline and distillates fell by 3.7 million barrels and 3 million barrels respectively, three times more than analysts' expectations, data from industry group American Petroleum Institute showed on Tuesday.
U.S. crude inventories rose 2.1 million barrels last week, well below analysts' expectation of a 3.4-million-barrel increase, according to the U.S. government's Energy Information Administration.
Crude inventories have risen for the past three weeks, typical in the approach to winter, when demand increases.
Several major banks have cut their price forecasts in the past two weeks for Brent and U.S. crude next year, but weeks of losses have brought prices into the range of these revised forecasts.
—CNBC contributed to this report.