Oil prices rose more than 2% on Wednesday ahead of a keenly watched meeting of the US central bank for clues on interest rate policy, while the conflict in the Middle East remains in focus.
Brent January crude futures were up about 2.5%, or $2.08, at $87.10 a barrel by 1316 GMT. US West Texas Intermediate crude futures gained about 2.8%, or $2.24, to $83.26 a barrel.
The Fed, which ends its meeting on Wednesday, is widely expected to keep rates steady.
In Europe, October inflation in the euro zone was at its lowest level in two years, a flash reading from Eurostat showed, leading to expectations that the European Central Bank is unlikely to raise interest rates anytime soon. The Bank of England is expected to meet on Thursday.
Interest rates aimed at taming inflation can slow economic growth and dampen oil demand.
In China – the world’s biggest oil importer – factory activity unexpectedly contracted in October, a private survey showed on Wednesday, adding to lower official figures from a day earlier and raising questions about its fragile economic recovery.
Oil prices fell on Tuesday amid record US crude output and dismal economic data from China, as well as signs that despite the escalation of conflict in the Middle East there has so far been no apparent disruption to oil supplies.
In Gaza, a first group of wounded was evacuated to Egypt on Wednesday, a source and Egyptian media said, as Israeli forces pressed in their fight against Hamas militants.
Iran’s Supreme Leader Ayatollah Ali Khamenei on Wednesday called on Islamic states to stop oil and food exports to Israel, demanding an end to its bombing of the Gaza Strip, state media reported.