* Investors await U.S. Federal Reserve meeting result
* U.S. crude inventories rise, distillates fall - EIA
* Iraq says Syria war spillover hinders oilfields, pipelines
(Adds U.S. inventory report, updates prices)
LONDON, Jan 29 Brent crude oil traded above $107
a barrel on Wednesday as investors waited to hear the latest
development in U.S. monetary stimulus programme, with prices
supported as concerns of turmoil in emerging economies eased.
Asian markets rallied and most other risk assets improved,
supporting oil, after Turkey stunned investors with a huge hike
in interest rates, stirring hopes the drastic action would
short-circuit a vicious cycle of selling in emerging markets and
revive risk appetite.
Brent was up by 30 cents to $107.71 per barrel as of
1538 GMT. U.S. oil was down 11 cents to $97.30, after
settling at its highest since Dec. 31.
"We still do not anticipate a sustained price rebound for
either benchmark, and especially Brent, from here," said VTB
Capital PLC oil strategist Andrey Kryuchenkov.
"Attention is to turn to the broader market later tonight,
as the U.S. Federal Reserve releases its January policy
Brent has declined 3 percent this month following three
straight months of gains. U.S. oil has lost 1.3 percent this
month, but that follows a steep gain of 6 percent in December,
the largest since July.
The price difference between the two contracts CL-LCO1=R
held above $10 a barrel.
Financial markets are waiting for the result of a meeting of
the U.S. Federal Reserve, due to finish on Wednesday, where the
central bank is widely expected to trim its monetary stimulus by
another $10 billion per month.
"Oil markets continue to oscillate between quantitative
easing tapering, emerging market concerns, and physical
supply/demand," analysts at ANZ Bank said in a note.
Inventory data from the U.S. Energy Information
Administration (EIA) announced at 1530 GMT showed a large
increase in U.S. crude stocks.
Crude inventories rose by 6.4 million barrels, the EIA
reported, more than the 2.3 million-barrel increase expected,
and more than the 4.7 million-barrel increase reported by
industry group the American Petroleum Institute on Tuesday.
Further support for oil is coming from supply concerns from
the Middle East.
Spillover attacks from the civil war in Syria have hindered
development of Iraq's gas and oil reserves and a major pipeline
to the Mediterranean has been blown up dozens of times, Iraq's
top energy official said on Tuesday.
(Additional reporting by Christopher Johnson and Alex Lawler in
London and Manash Goswami in Singapore; editing by Keiron
Henderson and Jason Neely)