On Wednesday, oil prices declined due to concerns over gasoline demand ahead of a U.S. Federal Reserve meeting at which the central bank is likely to raise interest rates by at least 75 basis points to battle inflation.

At 00:08 GMT, WTI crude futures declined 8 cents, or 0.1%, to $118.85 a barrel. Brent crude futures lost 26 cents, or 0.2 percent, to $120.91 a barrel.

As a result of soaring inflation, investors and oil traders are preparing for a significant move by the Fed this week, which may be the most influential U.S. interest rate increase in 28 years.

On the demand side, the recent COVID epidemic in China, which has been tied to a 24-hour bar in Beijing, has sparked fears of a new wave of lockdowns.

In its monthly report, the Organization of the Petroleum Exporting Countries (OPEC) reaffirmed its prediction that global oil demand will surpass pre-pandemic levels in 2022. However, OPEC noted that Russia's invasion of Ukraine - which Moscow refers to as a "special operation" - and developments related to the coronavirus pandemic pose a significant risk.

OPEC delegates and industry sources told Reuters that the organization expects demand growth to decelerate next year as rising oil prices contribute to inflation and drag the global economy.

Notwithstanding, prices are supported by limited supply, which has been exacerbated by a decline in exports from Libya due to a political situation that has affected production and ports.