* U.S. crude gains 6 cents; Brent slips 5 cents
* Euro scales fresh 16-month peak against dollar early in Asia
* Brent oil may rise towards $126.48/bbl -technicals [ID:nL3E7FR02T]
* Coming up: FOMC rate decision; 1630 GMT
By Manash Goswami
SINGAPORE, April 27 (Reuters) - Crude futures fell on Wednesday as investors awaited the outcome of a meeting of the U.S. Federal Reserve for details of the bank’s assessment of the economy and its monetary policy stance, while a weak dollar provided support.
NYMEX crude for June delivery CLc1 fell 10 cents to $112.11 a barrel by 0254 GMT, after settling at $112.21. The price seesawed in Tuesday’s trade between a low of $111.12 and a peak of $112.64. Brent LCOc1 dropped 19 cents to $123.95 a barrel.
A slide in the dollar near 2-1/2-year lows has also helped silver prices rebound from the previous session’s sharp falls, and gold edge higher. The greenback has declined as investors bet the Fed will keep its easy policy, helping support dollar-denominated oil that has attracted investment as a hedge against inflation.
“Investors are being very cautious ahead of the Fed meeting and prices are drawing support from a weak dollar,” said Serene Lim, an analyst at ANZ. “Oil will continue to trade in this range till the outcome of the Fed meeting is known at least.”
Lim also expects oil to trade around this range in coming days, largely supported by a weak dollar, as the Fed is expected to continue with its accommodative stance, while any indication of a change may boost the dollar and cap oil prices.
“Any signs of a tightening bias could renew interest in the dollar and that may limit gains in oil prices,” Lim said.
Technicals show Brent may break a resistance at $124.81 per barrel and rise towards $126.48, while U.S. oil CLc1 will be technically neutral before it escapes from a consolidation range of $111.08-$113.48 per barrel, according to Reuters market analyst Wang Tao.
The world’s top consumers are starting to show signs of being hurt by rising oil prices. U.S. President Barack Obama on Tuesday urged world 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 toward $4 a gallon. [ID:nN26290739]
China grappled with a strike by truckers against the steep increases in gasoline and diesel prices. [ID:nN26290739]
Standard and Poor’s on Wednesday threatened to cut Japan’s sovereign rating, warning that the huge cost from last month’s devastating earthquake will hurt the world’s third-largest oil consumer’s already weak public finances without tax hikes. [ID:nL3E7FR07G]
Violence in the Middle East has spread and intensified in recent weeks, spilling over to Syria and Yemen, helping put a floor under oil prices, analysts said.
“The unrest has been largely factored in,” ANZ’s Lim said. “Unless anything dramatic happens, they will continue to support oil prices.”
Syrian President Bashar al-Assad poured troops into a suburb of the capital overnight while his tanks pounded Deraa to crush resistance in the southern city where the revolt against his autocratic rule began on March 18. [ID:nLDE73P20N]
The military deadlock in Libya has exposed growing international rifts, highlighting the possibility of unrest in Libya being dragged out. Critics of NATO bombing called it another case of the West trying to overthrow a regime by stretching the terms of a U.N. resolution.
British and U.S. officials met on Tuesday to discuss how to step up military pressure on Gaddafi, as the Libyan leader’s army fought fierce clashes with rebels in besieged Misrata. [ID:nLDE73P202] (Editing by Clarence Fernandez)