Oil futures slipped early after a U.S. inventory report late-Tuesday showed a bigger-than-expected weekly climb and as investors watched for an update in policy from the Federal Reserve, which could provide guidance on the health of the domestic economy, factor in the outlook for crude consumption and production.

The American Petroleum Institute reported that U.S. crude supplies rose by 1.4 million barrels for the week ended Dec. 6, according to sources. The API data also showed stockpile increases of 4.9 million barrels for gasoline and 3.2 million barrels for distillates.

West Texas Intermediate crude for January delivery declined 32 cents, or 0.5%,at $58.92 a barrel on the New York Mercantile Exchange, more than wiping out its gain from Tuesday, which placed it at its highest front-month contract settlement since Sept. 17, according to Dow Jones market Data.

February Brent crude lost 47 cents, or 0.7%, to trade at $63.87 a barrel on ICE Futures Europe, following its virtually flat finish a day ago.

Source : Market Watch