London - Brent crude fell below 110 dollars per barrel on Tuesday, as easing worries over a potential U.S. attack on Syria calmed fears of a disruption to Middle East oil supplies.
The price drop was also after output resumed at a western Libyan oil field.
U.S. air strikes on Syria now look unlikely after a deal to remove Syria's chemical weapons, although the U.S., Britain and France have warned President Bashar al-Assad of consequences if he fails to comply.
Oil supplies from Libya, hit this year by unrest and strikes, may be improving after the government in Tripoli said a tentative deal with protesters in the country's west would allow pumping to resume from one oil field.
Investors are also wary over the market outlook ahead of a meeting of the U.S. central bank, which is likely to signal tighter monetary policy and could strengthen the dollar.
"This Federal Reserve meeting is the most interesting for at least a year because it could mark the exit from ultra-loose monetary policy," Commerzbank senior oil and commodities analyst Carsten Fritsch said.
"The market believes the U.S. dollar will strengthen if monetary conditions are tightened, which would put some pressure on oil," he added.
Brent crude for delivery in November was down 30 cents at 109.77 dollar per barrel by 0835 GMT, after touching a near-one-month low of 108.73 dollars in the previous session.
The benchmark slid 2.4 per cent on Monday, its steepest one-day decline since June 20, after the deal to strip Syria of chemical weapons.
U.S. crude for October delivery fell 50 cents to106.09 dollars per barrel, after hitting a session low of 105.59 dollars, it’s weakest since Sept. 3.
Brent has lost 6.4 per cent since hitting a six-month top of 117.34 dollar in late August when a U.S. military strike against Syria appeared imminent.
Libya is moving towards restarting some oil output with a deal to resume pumping at its western El Sharara oilfield. Other fields may follow, local officials said
The worst disruption to Libyan oil supply since the 2011 revolution has cost Libya and Western companies billions of dollars in lost revenue and contributed to a spike in global prices.