Brent crude futures for February fell 33 cents, or 0.45%, to $72.91 a barrel by 0621 GMT. U.S. West Texas Intermediate crude futures for January dropped 29 cents, or 0.42%, to $68.32 a barrel, Reuters reported.

The market stumbled in overnight trade as firmer-than-expected U.S. inflation readings for November bolstered the view the Federal Reserve was unlikely to cut interest rates early next year, which would weigh on consumption.

Meanwhile, the weekly average of Russian crude exports jumped to the highest since July, ANZ analysts said, compounding oversupply concerns and further throwing doubt on the recent output cut agreement by the Organization of the Petroleum Exporting Countries and allies, together called OPEC+.

The U.S. Energy Information Administration also raised its forecast for supply in 2023 by 300,000 barrels per day to 12.93 million barrels per day from its previous report, in its most recent Short-Term Energy Outlook report.

The bearish outlook puts oil on track to continue falling on the week, continuing the trend of seven straight weeks of declines.

A policy meeting by the U.S. central bank that concludes later on Wednesday will determine the direction of markets, said Tina Teng, a market analyst with CMC Markets. "A more hawkish-than-expected stance by the Fed may cause a further drop in crude prices," Teng said.

The Federal Reserve is widely expected to keep rates on hold. However, investors will focus on Fed officials' views on the economy and where they see interest rates in the coming quarters.

Markets are hoping for and have largely priced in "aggressive rate cuts" for 2024, said Yeap Jun Rong, market strategist at IG. "Any disappointment on that front could strengthen the U.S. dollar and weigh on the risk environment," which could push down oil prices, Yeap said.

Suvro Sarkar, an analyst at DBS, said the Fed discussions were unlikely to elicit any surprises and that prices could recover somewhat in a "relief rally" after the meeting.

The United Nations on Wednesday passed a resolution calling for an immediate ceasefire in Gaza, with President Joe Biden warning that Israel was starting to lose international support because of the killing of civilians.

COP28 entered the final hours of negotiations on Wednesday morning as governments continued to wrangle over the future of oil and other fossil fuels. China's former vice minister Liu Zhenmin said on Wednesday morning in Dubai that some sticking points remained. A draft deal on Monday had been criticised for failing to call for a phase-out of fossil fuels.