(Reuters) - Brent crude held steady at $108 a barrel on Friday, after posting steep losses in the previous session on concerns over demand growth as Europe struggles to keep its debt crisis from spiraling out of control and hurting the global economy. Markets are worried about borrowing costs rising to unsustainable levels for nations such as France and Spain, even as Italy pledged to embark on fiscal reforms. Asian shares fell for a fourth day, and base metals slumped as investors exited riskier assets. Brent crude traded 9 cents higher at $108.31 a barrel by 0738 GMT, after slipping as low as $107.51. U.S. oil rose 5 cents to $98.87, after sliding to $98.01. "The pullback that we have seen shouldn't come as a surprise, as the euro zone crisis and the ballooning costs are having an impact across the board," said Ben Le Brun, market analyst at OptionsXpress. "Markets are just trading from one headline to the next." Brent is poised for a weekly fall of 5.4 percent, reversing three weeks of gains in its steepest decline since the week ended September 24. U.S. oil may post a weekly fall after six weeks of gains. Oil prices tumbled in the previous session as investors booked profits. The U.S. benchmark settled down 3.67 percent, its biggest one-day percentage loss for front-month crude in New York since September 28. Brent dropped 3.27 percent. Italy's new technocrat prime minister, Mario Monti, outlined a raft of policies including pension and labor market reform, a crackdown on tax evasion and changes to the tax system in his maiden speech to parliament. ECONOMIC OUTLOOK That didn't help soothe investor worries as Spain was forced to pay the highest borrowing costs since 1997 at a sale of 10-year bonds. "The losses seen overnight in Europe moved their way through the US markets," Ben Taylor at CMC Markets said in a report. "A move through key support levels suggests further falls." The uncertainty prompted ANZ to join the ranks of banks lowering forecasts of the difference between European benchmark Brent and U.S. oil to an average of about $5 a barrel over the next 12 months. The spread has sharply narrowed from $28 in mid-October and was at a little over $9 on Friday. Still, investors are fearful about the outlook for growth in the United States, the world's top oil consumer, despite a string of recent positive economic numbers, with the latest being a seven-month low hit by new claims for jobless benefits last week. A 12-member "super committee" has until November 23 to reach a deal to cut U.S. deficits by at least $1.2 trillion over 10 years. If the panel is unable to come up with a deficit reduction plan, automatic spending cuts would kick in across federal agencies, beginning in January 2013, two months after next year's election. "It is not just Europe -- lest anyone forget, by next Wednesday, we are also due to hear the results of the deliberations of the U.S. Deficit Supercommittee," analysts at JPMorgan said in a report. "We may be closer (to a resolution), but economic risks to the oil market over the next two weeks will be considerable." MIDDLE EAST Yet there is a floor under oil prices at current levels, thanks to supply concerns from the Middle East as tensions over Iran's nuclear program escalate, Le Brun said. Major powers closed ranks on Thursday to increase pressure on Iran to address fears about its nuclear ambitions, and the U.N. nuclear chief said it was his duty to "alert the world" about suspected Iranian efforts to develop atom bombs.

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