May 17-Oil prices rebounded on Wednesday as the Federal Reserve's decision to leave rates low offset an overall bearish inventory report and Spain's downgrading.

Light, sweet crude for June delivery rose 78 cents to settle at 83.22 U.S. dollars a barrel on the New York Mercantile Exchange.

Crude futures pared early losses after the Fed said it will continue to keep the key interest rates unchanged at the near-zero low levels "for an extended period."

The rate decision boosted the riskier assets including energy commodities, which traded lower earlier on Wednesday as rating agency Standard & Poor lowered Spain's sovereign rating to AA from AA-plus. Oil prices plunged on Tuesday after S&P cut Greece's rating to junk and Portugal's to AA-minus.

Meanwhile, government data showed that crude stockpiles gained by 1.9 million barrels last week, which also pressured on the crude futures.

In London, Brent crude for June delivery rose 50 cents to 86.28 dollars a barrel on the ICE Futures Exchange.