* Dollar at three-year low against major currencies
* API reports 4.9 million-barrel rise in U.S. crude stocks
* Coming up: FOMC rate decision; 1630 GMT
(Previous SINGAPORE, updates prices)
LONDON, April 27 (Reuters) - Brent crude oil edged above
$124 a barrel on Wednesday as support from a weaker dollar ahead
of a Federal Reserve meeting expected to maintain its loose
monetary policy countered rising U.S. inventories.
The dollar slid to a three-year low as investors bet the Fed
meeting, which ends on Wednesday, would keep an easy policy,
helping support dollar-denominated oil that has attracted
investment as a hedge against inflation.
Brent crude for June <LCOc1> rose 31 cents to $124.45 a
barrel by 0910 GMT. On Tuesday, it gained 48 cents to settle at
$124.14 a barrel, having bounced off a $122.78 low. U.S. crude
<CLc1> was up 22 cents to $112.43.
"Investors are being very cautious ahead of the Fed meeting
and prices are drawing support from a weak dollar," said Serene
Lim, an analyst at ANZ. "Oil will continue to trade in this
range till the outcome of the Fed meeting is known at least."
U.S. crude stocks jumped 4.9 million barrels last week as
imports increased, the American Petroleum Institute (API) said
on Tuesday before the release of the government's inventory
report later on Wednesday. []
Violence in the Middle East, which has largely shut down
Libya's oil exports, has spilled over to Syria and Yemen,
helping put a floor under the market.
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U.S. INVENTORIES
Before the Fed's decision at 1630 GMT, investors will be
watching out for the latest snapshot of U.S. fuel supplies.
A weekly report from the U.S. Energy Information
Administration at 10:30 a.m. EDT (1430 GMT) is expected to show
crude stocks rising by 800,000 barrels -- much less than the
increase reported by the API on Tuesday.
Gasoline stocks are expected to fall 1.1 million barrels,
while distillates are forecast to increase by 100,000 barrels.
U.S. crude has risen 23 percent so far this year and
consumers in the world's largest economy are starting to show
signs of being hurt by higher fuel costs.
President Obama on Tuesday urged producers to lift crude
output as he sought to deflect public anger over high gasoline
prices. U.S. motor fuel prices have become a heated political
issue after pushing towards $4 a gallon. []
Obama's appeal followed comments from top oil exporter Saudi
Arabia earlier in the day that it was not comfortable with high
oil prices and a strike last week by truckers in China
protesting over higher fuel costs.
(Reporting by Manash Goswami in Singapore and Alex Lawler;
editing by Jason Neely)
