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Oil prices slipped in and out of positive territory on Wednesday before an expected rate hike by the Federal Reserve, but found a floor as market participants weighed falling U.S. crude stockpiles and European sanctions on Russian barrels starting in December.

Brent crude dipped 15 cents, or 0.2%, to $94.50 a barrel by 1346 GMT, while U.S. West Texas Intermediate (WTI) crude was down 13 cents, or 0.2%, at $88.24 per barrel.

Weighing on broader markets including European shares are expectations that the U.S. Federal Reserve will deliver its fourth, 75 basis points interest rate increase at 1800 GMT.

U.S. crude oil stocks fell about 6.5 million barrels for the week ended Oct. 28, according to market sources citing American Petroleum Institute figures. [API/S] Official data is due at 1430 GMT. [EIA/S]

Meanwhile, oil output from the Organization of the Petroleum Exporting Countries (OPEC) fell in October for the first time since June, in addition to pumping 1.36 million barrels per day below its targets.

China's zero-COVID policy has been a main factor in keeping a lid on oil prices as repeated lockdowns have slowed growth and pared oil demand.

An unverified note on social media said the Chinese government was going to consider ways to relax COVID-19 rules from next March, potentially boosting demand in the world's No.2 oil user.

The potential disruption from the European Union embargo on Russian oil that is set to start on Dec. 5 may also be pushing prices higher. The ban, a reaction to Russia's invasion of Ukraine, will be followed by a halt on oil product imports in February.

"Despite slowing economies and China’s COVID-19 woes, the odds are that the lack of supply will gain the upper hand over demand concerns in the short term. Therefore, expect oil prices to close out this year heading into triple-digit territory," PVM analyst Stephen Brennock said.