Brent rises $2 on Fed promise of low interest rates

SINGAPORE (Reuters) - Brent crude rose $2 in early Asian trade on Wednesday, extending the previous session's gains, after the U.S. Federal Reserve promised to extend near-zero interest rates for two more years.

Brent (brent.167)crude for September rose as much as $104.77 a barrel and traded at $104.50 by 8:25 p.m. EDT, while U.S. oil rose as high as $82.43 and traded at $81.18.

The Federal Reserve took the unprecedented step of promising to keep interest rates near zero for at least two more years and said it would consider further steps to help growth.

On Tuesday, Brent ended post settlement trading up $1.76 at $105.50 a barrel. That was after it settled at $102.57, down $1.17, the lowest since February 18. It bounced as high as $105.95 after falling $5 to $98.74, the lowest intraday price since February 8.

U.S. oil rallied to end post-settlement trading up 83 cents at $82.14 a barrel. It settled at $79.30, down $2.01, having reached $83.05 after falling to $75.71, the lowest since September 2010.

The American Petroleum Institute, in a report late on Tuesday, said domestic crude stocks fell 5.2 million barrels last week. Distillate stocks fell 558,000 barrels and gasoline stocks dropped 1.0 million barrels while refinery utilization rose 0.5 percentage point, the API said.

That compares with an expanded Reuters poll that forecast U.S. crude stockpiles to have risen for the third straight time last week as releases from the Strategic Petroleum Reserve kept moving into commercial inventories.

(Reporting by Manash Goswami; Editing by Clarence Fernandez)