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US oil prices edge lower on higher supplies

US oil prices slipped on Wednesday after an unexpectedly large rise in US crude inventories.

NEW YORK: US oil prices slipped on Wednesday after an unexpectedly large rise in US crude inventories.

US benchmark West Texas Intermediate for delivery in March fell five cents to close at $97.36 a barrel on the New York Mercantile Exchange.

European benchmark Brent oil for March delivery rose 44 cents to $107.85 a barrel in London.

The US Department of Energy said US crude inventories rose by 6.4 million barrels in the week ending January 24. Analysts' consensus forecast had been for an increase of 2.2 million barrels.

Analysts were surprised by a big increase in crude imports to the US and increased supplies at the closely watched Cushing, Oklahoma trading hub.

But John Kilduff, founding partner at Again Capital, noted that distillate stocks, which include heating oil and diesel, fell by 4.6 million barrels, more than the 2.6 million projected by analysts.

Consumers are using more heating oil due to a bout of cold wintry weather affecting much of the United States.

Kilduff said the cold weather will set a floor price under oil.

"Distillate inventories are going to stay under pressure, which is going to give support to the whole petroleum complex," Kilduff said.

Traders were also eyeing news out of the US Federal Reserve, which trimmed its bond-buying stimulus programme by $10 billion, as expected, to $65 billion. It was the second month in a row the Fed has reduced the asset purchases by $10 billion as it sees continued improvement in the world's largest economy.

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