(Reuters) - Brent held steady above $125 on Tuesday as comments from the U.S. Federal Reserve indicating easy monetary policy would remain in place for some time raised investors' appetite for riskier assets.
Oil prices also continued to draw support from supply concerns amid tightening Western sanctions on Iran over the Islamic Republic's disputed nuclear program.
Brent crude fell 10 cents to $125.55 by 0602 GMT after gaining 52 cents to settle at $125.65 a barrel on Monday.
U.S. crude was also down 10 cents to $106.93.
"It was more a reminder that the Fed stands ready to turn on the printing presses again should conditions warrant it," said Ben Le Brun, market analyst with OptionsXpress in Sydney.
"All risk assets including oil rallied strongly last night after his comments and this has to a large degree offset the potential impact from a slowdown in China."
Fed Chairman Ben Bernanke said the U.S. economy needs to grow more quickly if it is to produce enough jobs to bring down the unemployment rate and this process can be supported by continued accommodative policies. The U.S. central bank has said it would likely keep interest rates near zero at least through late 2014.
Investors were expecting a quick reversal of monetary easing following upbeat economic signs.
Asian stocks rebounded, after a more than 1 percent gain in Wall Street stocks, while the dollar eased following Bernanke's comments. <MKTS/GLOB>
A weaker greenback makes dollar-denominated commodities cheaper for holders of othercurrencies.
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