* Libyan oil exports under 10 percent of capacity * More than 3 million bpd of oil supply out - Barclays * Market await clues on policy from Federal Reserve meeting * U.S. crude oil inventories seen up 3.2 mln barrels By Christopher Johnson LONDON, Oct 29 (Reuters) - Brent crude oil consolidated around $109 a barrel on Tuesday, holding on to most recent gains after reports of a sharp drop in Libyan oil exports rekindled worries over global supply. Libya's crude oil exports have dropped to around 90,000 barrels per day (bpd), less than 10 percent of capacity, due to the worst disruption since a 2011 civil war. The loss of most of Libya's oil exports as well as spiraling violence in Iraq and unrest in other key producers has removed more than 3 million bpd from the oil market, a level not seen since August. Brent futures for December were down 50 cents at $109.11 a barrel by 0940 GMT after settling up $2.68 on Monday. U.S. light, sweet crude for December was down 40 cents at $98.28 a barrel. "The loss of Libyan oil supply is supporting prices," said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt. "With Libyan oil, the global oil market is amply supplied. Without it, the market is tight." Libya's prime minister said exports from the eastern port of Hariga with a capacity of 110,000 bpd would resume after one week following a two-month blockade due to strikes and protests, but there were few projections for further restarts. But analysts said Libya's oil industry faces a series of severe challenges that may keep production and exports low. Iraqi oil supply is also beginning to be affected by serious sectarian bloodletting and widespread civil unrest, adding to the toll of unplanned outages. A bomb blast over the weekend close to a pipeline carrying crude from a major oilfield in Iraq provided support to the market, although oil exports were not affected. "Two of the most volatile oil producers, Libya and Iraq, experienced serious unrest over the weekend, and we think there is a high risk that the security problems could grow more acute and affect output in both countries," Barclays analysts said. But if Libyan supply were to return to the market, prices could retreat quickly again, analysts said. Masaki Suematsu, energy team sales manager at Newedge Japan, said: "Basically, I am not that bullish. I think $105 is the level we could see on the downside." The market awaited comment from the Federal Reserve's policy-making meeting, due to start later on Tuesday, after data on Monday showed U.S. manufacturing output barely rose in September and that contracts to buy previously owned homes recorded their largest drop in nearly 3-1/2 years. The Federal Reserve is widely expected to maintain its economic stimulus as it waits to see more evidence of how Washington's recent budget battle hurt the U.S. economy. U.S. oil stocks probably rose by 3.2 million barrels last week, while distillates and gasoline each fell by 1 million barrels, a Reuters poll showed ahead of weekly data.

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