Oil prices ended slightly higher on Tuesday in sluggish trading as the market awaited the Federal Reserve's policy statement on Wednesday that is expected to show whether it will reduce its monetary stimulus.

The program has been largely supportive of oil prices.

Brent oil was off an 11-week high set in the previous session and U.S. crude oil had dropped from a nine-month high.

Until the Fed's policy decision, oil trading will be largely muted, said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut.

"I'd expect we are going to see quiet trading between now and 23 and a half hours from now," he said.

Global financial markets have been on edge since Fed Chairman Ben Bernanke suggested the central bank would be looking to pull back its stimulus program.

The Fed started its two-day Federal Open Market Committee policy meeting on Tuesday. Its three quantitative-easing schemes have buoyed prices of commodities as they pumped liquidity into the market and lowered the value of the dollar, making greenback-traded commodities cheaper for investors in foreign currencies.

Brent crude oil futures for August delivery settled 55 cents higher at $106.02 per barrel after trading as high as $106.24. Front-month U.S. crude oil futures finished the day 67 cents higher at $98.44 per barrel, after trading as high as $98.61. U.S. oil prices fell short of $98.74, a nine-month high, reached on Monday.

The market was rangebound on Tuesday, testing resistance and support levels after reaching new highs, Armstrong said, having hit those new highs due to possible U.S. involvement in Syria's civil war.

"The potential for the U.S. and its allies to begin arming Syrian rebels is what pushed us into this new trading range," Armstrong said.

The Syrian conflict has become a proxy for warring Middle Eastern factions. Investors fear oil supply disruptions if other Middle Eastern nations are drawn into the conflict. The region, in total, pumps more than a third of the world's oil.

A weaker dollar lent some support to oil prices on Tuesday as did a rise in consumer prices and an upbeat outlook for the housing sector.

The dollar index, a measure of the dollar's strength against a basket of currencies, was 0.21 percent lower.

U.S. commercial crude oil stocks likely fell last week due to lower imports, according to a Reuters poll.

Statoil said some production fields connected to the Oseberg oil field, which in total produce nearly 120,000 barrels per day (bpd), has resumed after an outage on Monday.

Royal Dutch Shell Plc said it initiated a planned shutdown at its 600,000 bpd Motiva refinery in Port Arthur, Texas, on Friday.

New York Mercantile Exchange gasoline futures settled at $2.87 per gallon, ending slightly higher from Monday's $2.85 settlement.

Iraq plans to ramp up oil production by nearly 45 percent by the end of 2014 to 4.5 million bpd without input from Kurdistan.