SINGAPORE, Oct 30 Reuters Oil prices slipped more than 1 on Monday as investors adopted caution ahead of a U.S. Federal Reserve policy meeting and China39;s manufacturing data due this week, offsetting support from tension in the Middle East.

Brent crude futures dropped 1, or 97 cents, to 89.51 a barrel by 0718 GMT, while U.S. West Texas Intermediate crude was down 1.3, or 1.13, at 84.41 a barrel.

Despite an escalation in the HamasIsrael war, the ground invasion was widely expected, said CMC Markets analyst Tina Teng.

The weekend playout signals no further expansion into a wider regional war, which caused a retreat in oil prices.

Both Brent and WTI had ended Friday up 3 after Israel stepped up ground incursions into Gaza, stoking worries that the conflict could widen in a region that accounts for a third of global oil production.

Investors are watching for the outcome of Wednesday39;s U.S. Fed meeting, U.S. jobs data and earnings from tech giant Apple Inc for signs of any economic slowdown that could affect fuel demand in the world39;s top oil consumer.

The Fed is widely expected to keep interest rates unchanged, however, while the central banks of Britain and Japan are also set to review their policies.

China will report its October manufacturing and services PMIs this week, with investors looking out for more signs that the economy of the world39;s top crude importer is stabilising and fuel demand is improving after supportive measures by Beijing.

As…