LONDON: Brent crude fell slightly on Wednesday, hit by lingering worries about Italy and Greece's ability to service their massive debt burdens, but tight supply kept losses slender.
Prices have been pressured by fears Europe's debt crisis may spread further, crimp economic growth and therefore demand for oil.
"There's a focus on sovereign debt yields, they are still a concern and they are driving prices," said Olivier Jakob at Petromatrix in Zug, Switzerland.
Brent crude fell 23 cents to $111.95 a barrel by 1049 GMT, while US oil fell 43 cents to $98.94.
The oil market is tightening and high oil prices are already hurting growth in developing economies and threaten any economic recovery in Europe, the head of the International Energy Agency (IEA) said on Wednesday.
Tight supply has contributed to a near 9 percent rise for Brent since the start of October. BP'S chief economist said on Wednesday he expected oil prices to stay at current levels, above $100 per barrel, unless the world global economy stalls sharply.
"Inventories are falling and the physical market is very tight, we see oil trading in a sideways range," Andy Sommer at EGL in Dietikon, Switzerland said.
US retail sales rose and wholesale prices fell in October and a gauge of New York state manufacturing showed growth in November, bolstering hopes for a stronger fourth quarter and sending US crude to a 16-week peak in the previous session.
FRANCE WATCHED
France has become the latest euro zone member to come under pressure after a spike in its borrowing costs on jittery bond markets fuelled concerns the region's second-biggest economy was also being sucked into the spiralling debt crisis, besides nations such as Italy and Spain.
Supply concerns are partly being caused by tensions escalating over Iran's nuclear programme.
Western states will try this week to overcome divisions with Russia over a UN nuclear report on the Middle East nation, hoping to show unity that will pile pressure on Tehran to address growing fears it wants atomic bombs.
US crude prices were weighed by data from the American Petroleum Institute showing that oil inventories unexpectedly rose 1.3 million barrels in the week to Nov. 11, versus analysts' expectations for a drawdown of 1.2 million.
Investors will watch for US EIA inventory stats at 1530 GMT.
US crude oil inventories were expected to have fallen last week for the second straight time on lower imports and slightly higher refinery runs, an expanded Reuters poll of analysts showed on Tuesday.
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