Brent oil eases below $108 ahead of Fed

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Brent crude slipped below $108 a barrel on Wednesday as Libyan production began to recover and ahead of a Federal Reserve decision on bond purchases.

Libyan oil supplies are expected to rise to between 400,000 and 450,000 barrels per day (bpd) as one of the biggest western oilfields, El Sharara, ramps up after workers resumed pumping on Monday. The country's oil production, however, is still far below its pre-war level of 1.6 million bpd.

"Apart from the diminished geopolitical risks, reports that oil production in Libya appears to be rising slightly have been weighing on prices," said Commerzbank.

Brent slipped 30 cents to $107.89 a barrel by 1217 GMT, after slipping to its lowest in more than a month in the previous session.

U.S. crude gained 18 cents to $105.60, after settling $1.17 per barrel lower on Tuesday.

Investors were also awaiting the outcome of a two-day Fed meeting at which the U.S. central bank is expected to cut its monthly bond purchases by at least $10 billion.

While the likely outcome of the Fed discussions might already be priced into oil, a bigger tapering could pose a risk to oil prices and prompt selling, analysts said.

Oil was also pressured after world powers held talks to eliminate Syria's chemical weapons - easing concerns that oil supply from the Middle East would be at risk.

U.S. crude inventories fell by 252,000 barrels in the week to Sept. 13, compared with analysts' expectations for a drop of 1.4 million barrels in a Reuters poll, data from industry group the American Petroleum Institute showed.

Oil inventory data from the U.S. government's Energy Information Administration is due at 1430 GMT. (Additional reporting by Jessica Jaganathan in Singapore; Editing by William Hardy)



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