Brent crude oil holds above $102, Syria fears support

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Brent crude held above $102 a barrel as some investors cautiously returned to oil on Friday, a day after a steep decline sparked by the U.S. Federal Reserve's plans to wind down its stimulus programme.

World shares, bonds and commodities steadied on Friday following the broad market rout. For oil, demand growth concerns following weak manufacturing data from China, the world's second biggest oil consumer, added further pressure.

Brent crude was up 16 cents to $102.31 by 1232 GMT. U.S. oil was up 12 cents at $95.26. On Thursday, crude posted its biggest daily loss since November with Brent ending down $3.97 and U.S. oil finishing $2.84 lower.

"Yesterday's events mean that oil shed all of the gains of the past two weeks, showing just how susceptible the oil market is to external influences," said a Commerzbank research note.

"There has, after all, been no change in the fundamentals since the beginning of the month."

China's factory activity weakened to a nine-month low in June as demand faltered, adding to data pointing to a sluggish economy and raising the chances the country could miss its growth target of 7.5 percent for this year.

"A slowing of China's manufacturing sector certainly suggests that oil demand growth from the world's largest oil demand growth engine will also certainly slow," said Dominick Chirichella of Energy Management Institute.

"The likelihood of supply continuing to outstrip demand is going to continue going forward."

Prices were supported by concern about potential supply disruptions in the Middle East, with violence in Syria threatening to engulf neighbouring countries.

Iraq warned Syria's civil war is tearing the Middle East apart and Lebanon's president urged his country's Hezbollah movement on Thursday to pull its fighters out of the conflict.

Syria's turmoil is dragging its neighbours into a deadly confrontation between Shi'ite Iran supporting President Bashar al-Assad and Sunni Arab Gulf nations backing Syrian rebels.



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