Oil sheds 1% on dollar's strength, Fed's meeting

Oil futures slid nearly one percent as the dollar index hit the highest since November 14, following earlier data from the US, the world's largest energy consumer, while the Federal Open Market Committee starts its two-day policy meeting in Washington.

As of 05:35 GMT, US West Texas Intermediate declined 0.69% to $57.59 a barrel from the opening of $57.99, while Brent futures due on February 15 slid 0.87% to $64.13 a barrel from the opening of $64.69, as the dollar index rose 0.32% to 94.16 from the opening of 93.87, marking a one-month high. 

Earlier US data showed producer prices rose 0.4% in November in line with expectations and with no change from October's reading, while core prices, excluding food and fuel, rose 0.3%, beating expectations of 0.2% and just below October's 0.4% rise. 

The stable data underpinned the dollar to a month high and sent oil futures down for the first time in four sessions, with Brent moving away from the highest since June 2016. 

Now markets look upon the FOMC's last 2017 meeting today and tomorrow, with policymakers expected to unveil their three-year forecasts for inflation, growth, unemployment, and interest rates, while expected to also hike rates by 25 basis points for the third time this year. 

A major pipeline in the North sea was closed, stopping 400 thousand bpd from been shifted to near Edinburgh, buoying Brent futures sharply.  

OPEC asserted that it's possible to draw up a strategy to exit the global production deal in the June 2018 in case market oversupply was sapped up.

In other news, Baker Hughes reported a rise of 2 in the US rig count to a total of 751 rigs, the highest since December 8. 

US output rose by 25 thousand bpd in the week ending December 1 to a total of 9.71 million bpd, the highest on record.