UPDATE 3-Oil falls below $110 on Syria, Libya as Fed eyed
* Crude falls further after sharpest drop in almost 3 months
* Easing tensions over Syria reduce risk premium
* Fed tapering seen likely, may hurt oil prices further
* Coming up: U.S. API oil inventories report at 2030 GMT
(Updates throughout, changes dateline, previous SINGAPORE)
LONDON, Sept 17 (Reuters) - Brent crude fell below $110 a barrel on Tuesday as easing worries over a potential U.S. attack on Syria calmed fears of a disruption to Middle East oil supplies and after output resumed at a western Libyan oilfield.
U.S. air strikes on Syria now look unlikely after a deal to remove Syria's chemical weapons, although the United States, 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 oilfield.
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 a barrel by 0835 GMT, after touching a near-one-month low of $108.73 in the previous session. The benchmark slid 2.4 percent 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 to $106.09 a barrel, after hitting a session low of $105.59, its weakest since Sept. 3.
Brent has lost 6.4 percent since hitting a six-month top of $117.34 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.
The Fed begins its two-day meeting later on Tuesday and is expected to cut its monthly $85-billion bond purchases by at least $10 billion as it begins to close the era of cheap money that has boosted the flow of funds into commodities.
"If our assessment is correct, the dollar could strengthen in the wake of the tapering announcement, followed by more selling in commodities," INTL FCStone analyst Ed Meir said.
Investors also awaited U.S. oil inventories data from the American Petroleum Institute (API) industry group at 2030 GMT, and the U.S. Energy Information Administration due on Wednesday at 1430 GMT.
A Reuters survey of analysts suggested U.S. commercial crude oil stockpiles fell last week by around 1.4 million barrels, while distillate inventories probably rose slightly.
(Additional reporting by Manolo Serapio in Singapore; Editing by Dale Hudson)