(Reuters) - Brent crude futures fell for the first time in four sessions on Tuesday as investors took profits, though they remained above $114 a barrel with declines limited by hopes the U.S. Federal Reserve would unveil further steps to stimulate the economy this week.
Profit-taking kicked in after Brent rose nearly $2 in the past three sessions, said Ken Hasegawa, a commodity sales manager at Newedge Japan, though prices are likely to remain fairly steady ahead of a keenly awaited Fed meeting on Wednesday and Thursday.
Some analysts believe the central bank will launch a third round of bond-buying due to recent weak economic data from the United States such as disappointing jobs numbers on Friday.
Additional stimulus would likely weaken the dollar, boosting the price of dollar-denominated commodities like oil.
London Brent crude for October delivery, which expires on Thursday, was trading 36 cents lower at $114.45 a barrel by 0520 GMT, after settling up 56 cents on Monday. U.S. crude for October delivery was down 39 cents at $96.15 a barrel.
"Prices have barely moved, suggesting the market is in waiting mode (ahead of the Fed gathering)," said Tetsu Emori, a Tokyo-based commodities fund manager at Astmax Investment.
"(Fed Chairman Ben) Bernanke has clearly said that the employment situation (in the U.S.) is not good, so there's a chance (of quantitative easing)."
Weak energy and economic data from China on Monday also dragged on oil prices, with crude imports declining 12.5 percent in August from a year earlier to the lowest daily rate since October 2010.
French bank Societe Generale said in a note that it expected base and precious metals prices to outperform oil and grain prices over the rest of the year, with scope for Brent to back down towards $100 over the coming months.
Newedge's Hasegawa also said that Brent could have neared its peak.
"The market kept on rising until mid-August and we are now waiting to see which direction it will move in next," Hasegawa said. "I agree with (Societe Generale's report). I think this is a peak and oil is expected to fall gradually on profit-taking (in the coming months.)"
Maintenance in the North Sea, where Brent crude is produced, has cut output this month and lent support to oil prices in the near term, along with the disruptions to U.S. Gulf of Mexico production after Hurricane Isaac.
Saudi Oil Minister Ali al-Naimi said on Monday the Kingdom was concerned about climbing oil prices, with Brent rising by more than 25 percent since late June.
Lingering geopolitical worries also helped put a floor under prices on Tuesday.
Prime Minister Benjamin Netanyahu said Israel and the United States were in talks on setting a "clear red line" for Iran's nuclear program, but the two allies remained at odds over whether to spell out a clear threshold for military action against Tehran.
U.S. crude oil and fuel inventories likely dropped last week, according to a Reuters survey of analysts on Monday, with imports and production having only just begun to recover after the interruption from Isaac.
Asian shares fell on Tuesday after last week's global rally as investors repositioned before a German Constitutional Court ruling on the euro zone's bailout funds which could remove one risk for Europe.
Market participants were also waiting for weekly petroleum data issued by the American Petroleum Institute at 4:30 p.m. EDT (2030 GMT) and OPEC's monthly report due at some point on Tuesday.
(Reporting by Osamu Tsukimori; Editing by Joseph Radford)