Oil steady above $107 Tuesday; Europe woes weigh

SINGAPORE, Dec 13 (Reuters) Brent crude was little changed above $107
on Tuesday, after falling in the previous session, on concerns of
demand growth as investors worried last week's pact by European leaders
may not be enough to stop the region's debt crisis from worsening.
The
worries echoed across financial markets. Asian stocks sank, the euro
languished near a twomonth low, gold plunged to a sevenweek low and
copper fell after posting its biggest decline in three weeks.
Oil
will be driven by headlines on Europe's fiscal condition and an
upcoming OPEC meet, with support coming from supply uncertainties in the
Middle East.
Brent rose 6 cents to $107.32 a barrel by 0433 GMT,
after sliding to as low as $107.07 and settling down $1.36. U.S. crude
gained 17 cents to $97.94, after settling $1.64 lower, trading below
$100 for a third day.
"Markets probably are thinking the euro zone is taking too long to get its act together," said Tony Nunan, risk manager at Mitsubishi Corp.
"But
it's also true that you can't force things at any quicker rate because
of the sheer number of countries involved in the decision making
process."
Friday's optimism over the European summit deal to
strengthen budget discipline was overshadowed by its shroud of legal
uncertainty and the absence of an unlimited financial backstop for the
single currency.
The uncertainty worsened after ratings agency
Moody's said it would review ratings of all EU member states in the
first quarter of 2012, while rival Fitch said the summit had failed to
provide a "comprehensive" solution to the debt crisis.
OPEC MEET
Oil
investors are awaiting the outcome of a meeting of producer group OPEC.
The group on Monday targeted a new 30million barreladay production deal
aimed at healing the rift left by a badtempered failure to reach an
output agreement when it last met in June.
At stake for the
Organization of the Petroleum Exporting Countries when it meets on
Wednesday is a credible policy going into a year when a sluggish global
economy could undermine fuel demand and send oil prices tumbling from
over $107 a barrel now.
"The members will aim for a proper
meeting, a unanimous agreement this time after talks broke down in the
last meeting," Nunan said.
Without a collective supply target,
OPEC members with spare capacity Saudi Arabia and its Gulf Arab allies
remain free to pump at will.
Saudi Oil Minister Ali alNaimi confirmed on Monday that the kingdom pumped 10.047 million barrels per day in November.
"Whether
or not OPEC agree to a ceiling, we see the end result being that Saudi
Arabia, Kuwait and the UAE will be the main swing producers in the
rebalancing process over the next six months," JPMorgan analysts said in
a report.
FED MEET
Financial markets are awaiting the
outcome of a U.S. Federal Reserve meeting later in the day to get an
idea of the outlook for the world's biggest economy.
The Fed's
policysetting Federal Open Market Committee looks set to hold off on
easing U.S. monetary policy for a second meeting as it gauges the impact
of Europe's crisis on the economy.
The United States has had a
series of positive numbers, raising hopes of a steady economic recovery
in the country that will help boost demand in the world's biggest oil
consumer.
"Growth in the United States could help pull the euro zone out of the crisis," Nunan said.
"But there is an equal risk of things going the other way, the EU pulling down the U.S."
Unrest in the Middle East is helping put a floor under prices as participants worry about supply disruptions.
An
explosion ripped through a gas pipeline near the town of Rastan in the
central Syrian province of Homs and flames were seen rising from the
site, a witness said, the second reported blast at an energy pipeline in
Homs in a week.