* 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
(Updates prices, adds quote in paragraph 4)
By Alex Lawler
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 statement expected to maintain loose
monetary policy, countered rising U.S. inventories.
The dollar slid to a three-year low as investors bet that
the Fed, after a meeting that ends on Wednesday, would keep an
easy policy. The fall helped support dollar-denominated oil,
which has attracted investment as a hedge against inflation.
Brent crude for June <LCOc1> rose 52 cents to $124.66 a
barrel by 1308 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 30 cents to $112.51.
"It had been fairly quiet before Easter, but it looks like
the market is resuming its upward march," said Christopher
Bellew, a broker at Bache Commodities. "Dollar weakness, and
continuing trouble around the world, is supporting the market."
Violence in the Middle East has spilled over to Syria and
Yemen. Italian oil and gas group Eni <ENI.MI>, reporting
earnings on Wednesday, said production fell almost 9 percent in
the first quarter because of unrest in Libya. []
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Lending support to Brent, BP said the North Sea's Forties
pipeline may have to be shut for a few days later this year due
to the discovery of an unexploded German mine from World War
Two. []
Forties usually sets the dated Brent physical crude
benchmark, which forms part of the underlying market for Brent
futures.
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.
On Tuesday, the American Petroleum Institute (API) said U.S.
crude stocks jumped 4.9 million barrels last week as imports
increased. []
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.
(Additional reporting by Manash Goswami in Singapore; editing
by Jason Neely and Jane Baird)
