The Fed's meeting will provide another test for oil prices, as investors assess how policymakers view inflation amid rising energy costs.
Crude oil prices are heading into another volatile week, with escalating geopolitical tensions in West Asia keeping supply fears alive and the US Federal Reserve's monetary policy decision expected to dictate market direction, analysts said.
With Brent crude already crossing $117 per barrel, investors will track developments around the Strait of Hormuz, threats to energy infrastructure, and weekly US inventory data for cues on the next move.
The American Petroleum Institute and the US Energy Information Administration will release their weekly stock estimates, while Cushing crude inventories and the Federal Open Market Committee's October 27-28 meeting will be in focus, they added.
"The near-term bias remains bullish but highly headline-driven; traders should avoid chasing sharp rallies and monitor geopolitical developments, Fed guidance and weekly inventory data for directional confirmation," said Ajit Mishra, SVP - Research at Religare Broking.