UPDATE 7-Oil slips on Fed policy concerns
* Libyan unrest eats into oil exports
* Market awaits Fed meeting minutes on Wednesday
* Front-month U.S. oil contract expires at end of session
* Coming up: API inventory data at 4:30 p.m. EDT
* Coming up: EIA oil data on Wednesday
(Adds details, updates prices. Changes byline/dateline to New York, pvs LONDON.)
NEW YORK, Aug 20 (Reuters) - Oil prices on both sides of the Atlantic were trading lower on Tuesday as traders took profit fearing the U.S. government would lay out plans to pull back its monetary easing program, which could ultimately dampen oil demand in the world's largest oil consumer.
Violence and civil unrest in Egypt and Libya kept a floor under prices, but the market shifted focus from Middle East worries to the U.S. Federal Reserve.
The Fed will release minutes from its latest policy meeting on Wednesday that are largely expected to give clues on when the central bank plans to taper its monthly $85 billion in asset purchases that have supported commodities in recent years.
Many believe tapering could begin next month.
Brent crude oil futures for October were down 26 cents to $109.64 a barrel at 11:05 a.m. EDT, (1505 GMT), after trading as low as $108.61.
U.S. crude oil futures for September delivery, which expire at the end of the trading session, were down 84 cents to $106.26, after trading as low as $105.23. October futures were trading 72 cents lower at $106.14.
U.S. oil prices remained rangebound between $103 and $108 per barrel, noted Gene McGillian, analyst with Tradition Energy in Stamford, Connecticut.
Not even an expected draw in crude oil inventories was supporting prices, he said.
"This does seem to be predicated on expectations of what the Fed will do," he added.
U.S. commercial crude inventories likely fell last week by 1.4 million barrels, an initial poll of Reuters analysts showed, ahead of the release of weekly data.
Industry group API is set to release its stockpile report on Tuesday at 4:30 p.m. EDT (2030 GMT). The U.S. Energy Information Administration issues its data on Wednesday at 10:30 a.m. EDT (1430 GMT).
In the Middle East, about half of Libya's more than 1.2-million-barrel-per-day export capacity remains shut down due to civil unrest, industry sources said.
Tensions in Egypt remained high after security forces arrested the top leader of the Muslim Brotherhood, pressing a crackdown on the group.
Egypt is not a major oil producer, but investors worry that unrest there could spread throughout the Middle East, which pumps more than a third of the world's oil.
(Additional reporting by Ron Bousso in London and Jessica Jaganathan in Singapore; editing by Jason Neely, David Cowell and Chizu Nomiyama)