New York's main contract, West Texas Intermediate (WTI) for March delivery, eased 23 cents to USD 97.18 in mid-morning trade while Brent North Sea crude for March was down one cent at USD 107.40. (Agencies)
Inventories were forecast to have risen 2.2 million barrels, on average, in the week to January 24, according to a forecast of 11 analysts surveyed by Dow Jones Newswires.
The official stockpiles report will be released by the US Energy Department later on Wednesday.
A rise indicates weak demand in the world's biggest economy and oil consuming nation, putting downward pressure on prices.
Desmond Chua, market analyst at CMC Markets in Singapore, said dealers were also keenly looking to see if the Fed further pares its monthly asset purchases when it concludes a two-day policy meeting on Wednesday.
He said the "most likely scenario" was that the Fed would go ahead with a further USD 10 billion reduction in monetary stimulus.
In December, the US central bank said it would reduce the stimulus by USD 10 billion to USD 75 billion a month in January.
The so-called tapering of the Fed's asset purchases would likely boost the greenback, making dollar-priced oil more expensive for countries using other currencies, dampening demand.
Chua said analysts would also focus on the language used in the announcement by the Fed, to sense if it was a unanimous decision or if there was any dissent between the members.
"We need to remember that there is a transition of members as well and more dissent going forward will make policy making a bit less straight forward," Chua said.
Fed chairman Ben Bernanke steps down on Friday after eight-year tenure, and will be succeeded by current vice-chairman Janet Yellen.
New York's main contract, West Texas Intermediate (WTI) for March delivery, eased 23 cents to USD 97.18 in mid-morning trade while Brent North Sea crude for March was down one cent at USD 107.40.