An oil rig is shown in this file photo.

Global oil prices edged higher on Wednesday in cautious deals as traders awaited the latest interest rate decision and weekly energy inventories data from key crude consumer the United States.

Brent North Sea crude for delivery in September added 57 cents to $105.49 a barrel in London midday deals.

New York's main contract, light sweet crude for September, gained 17 cents to $88.23 a barrel.

Crude futures had fallen on Tuesday and in earlier Asian trade on Wednesday, as fading hopes for additional stimulus measures from the US Federal Reserve and European Central Bank (ECB) led prices down, analysts said.

However, the market clawed its way back into positive territory in cautious London trading.

“All eyes are focused on the US Federal Reserve, although expectations for a decisive move to stimulate the economy appear to be waning,” said analysts at the Vienna-based JBC Energy consultancy in a research note to clients.

Traders were waiting to see the outcome of the two-day Fed meeting that concludes Wednesday, on the eve of a separate decision from the ECB.

The Fed's top policy makers were expected to shy away from launching new stimulus measures for the US economy, which is also the world's biggest consumer of crude.

The interest rate-setting Federal Open Market Committee (FOMC) began the meeting in Washington under the shadow of sub-par growth in the world's largest economy. The meeting concludes at about 20:15 SA time.

Ahead of the Fed announcement, traders will also focus their attention on the latest report on energy inventories in the United States.

At 17:30 SA time, the US government's Department of Energy will publish its overview of crude oil stockpiles for the week ending July 27. - Sapa-AFP