A third round of monetary stimulus, also called QE3, via bond-buying by the Fed should boost liquidity in markets and lift appetite for riskier assets like oil. Equities and other commodities, including copper, were also little changed ahead of the statement to be released after the central bank's meeting later in the day.
We are not expecting drastic changes from the Fed, but we are hoping to hear hints about QE3, said Ken Hasegawa, a commodity derivatives manager at Newedge Brokerage.
Trading will be quiet throughout the day until we get closer to the end of the meeting.
Brent crude rose 9 cents to $118.25 a barrel by 2:45 a.m. EDT (0645 GMT), while crude was up 14 cents at $103.69.
Analysts say the central bank will likely show it is slightly more upbeat on the economy but in little hurry to raise borrowing costs.
Investors wishing for clues into the prospect of a further monetary easing may be disappointed, they say, with economic growth just firm enough to weaken the case for more stimulus through Fed purchases of government or mortgage bonds.
But the latest data was a mixed bag, showing February home prices rising for the first time in 10 months while a measure of consumer confidence last month fell more than expected.
The overall picture for the global economy remains a little blurry at the moment. We don't have resolution on the debt crisis in Europe, and in the U.S. we are still trying to digest their data, said a senior crude trader based in Singapore.
And for China, well it seems to have stabilised but what is 8 percent in context to a sluggish global economy?
China's economy, the world's second largest, grew an annual 8.1 percent in the first quarter, its weakest pace in nearly three years.
While China's overall growth remained healthy, the slower rate has raised concern among investors, especially at a time when the debt-ridden euro zone's economic slump is deepening and the economic recovery remains fragile.
Supporting crude, oil inventories in the world's top consumer fell last week for the first time in five weeks, data from the American Petroleum Institute (API) showed on Tuesday, against expectations for a build.
Recent gains in oil prices had narrowed Brent's premium over WTI crude to $14.67. That premium fell as low as $12.99 last week, the smallest since February.
Crude stockpiles fell by 985,000 barrels in the week to April 20, compared with analyst expectations of a 2.7-million-barrel increase.
Gasoline stocks fell 3.6 million barrels, dropping more sharply than the expected 900,000 barrels, and distillate inventories decreased 3.56 million barrels, the API said.
Refinery utilization rose 0.6 percentage points, the API report showed, just above the forecast for a 0.5 percentage point increase.
The U.S. Energy Information Administration's own stockpiles report is due later on Wednesday.
Supply disruption concerns linked to key producer Iran continue to be on investors' radar although tensions between Tehran and the West seemed to have cooled momentarily.
Iran will meet with the six world powers -- the United States, Russia, China, German, France and Britain -- in Baghdad on May 23 for nuclear talks.
The West alleges that Iran is developing atomic weapons, but Iran, which has refused to stop enriching uranium, insists its nuclear program is for civilian use.
The risk premium for Iran remains, I don't see that coming off anytime soon, but the worst case scenario seems less of a possibility now, said Hasegawa of Newedge Brokerage.
(Editing by Manolo Serapio Jr. and Ed Davies)