While you were sleeping: Oil gains as refiners boost production

Equities on both sides of the Atlantic rose as the US Federal Open Market Committee began a two-day meeting that may result in its first interest rate rise since 2006.

In New York trading at about 3.25pm, the Dow Jones industrial average advanced 0.80%, the Standard & Poor's 500 Index gained 0.78%, while the Nasdaq Composite Index increased 0.45%.

Gains in shares of General Electric, last up 2.4%, led the Dow higher.

Shares of Chevron and Exxon Mobil also rose, both last up 1.9%, after oil climbed following an Energy Information Administration report showing US crude inventories fell by 2.1 million barrels last week.

West Texas Intermediate for October delivery climbed 4.7% to $US46.69 a barrel, while Brent for November settlement rallied 3.4% to $US49.37 a barrel.

"The major reason for the inventory decline is that refiners ramped up production," Toronto-based Manulife Asset Management fund manager Craig Bethune told Bloomberg. "They probably wanted to take advantage of the lower crude price."

While the gain in oil added to the positive sentiment on Wall Street, all eyes are firmly on the conclusion of the Fed meeting on Thursday when chairwoman Janet Yellen will give a press conference.

"If you asked most people in early August, they'd say it's likely the Fed will raise rates in mid-September, and I don't think people will be surprised if they do," New York-based George Schultze, who oversees US$200 million as founder and managing member of Schultze Asset Management, told Bloomberg.

Of the 80 economists polled by Reuters, only 35 said the central bank is likely to raise rates this week.

"The market is getting incrementally more comfortable that if the Fed is going to raise rates it's doing it for the right reasons," LPL Financial investment strategist John Canally told Reuters.

"We've been obsessing about it for so long and maybe it’s finally dawned on the market that the 'when' doesn't matter as much as how far and how fast the Fed will go."

Inflation data certainly would not prompt any rush. A Labor Department report shows the consumer price index eased 0.1%, the first decline since January, following a 0.1% increase in July.

"One thorn in the Fed's side is inflation," Standard Chartered Bank Amercias economic research head Mike Moran told Reuters. "I don't think today's CPI number really advances the debate on whether we are any closer to getting to that 2% target that the Fed is clearly focused on."

Shares of FedEx fell, last 3.4% weaker, after the company reported quarterly profit that fell short of expectations and downgraded its full-year earnings forecast.

In Europe, the Stoxx 600 Index ended the session with a 1.5% jump from the previous close. Germany's DAX Index rose 0.4%, the UK's FTSE 100 Index added 1.5%, while France's CAC 40 Index increased 1.7%.

Shares of SABMiller rallied 20% after the company said Anheuser-Busch InBev intends to make a proposal to acquire it.

(BusinessDesk)