By Ga-Woon Philip Vahn and Surabhi Sahu Of DOW JONES NEWSWIRES SINGAPORE (Dow Jones)--Crude-oil futures traded sideways in Asia Thursday, as investors paused after the recent strong rally to reassess downside risks stemming from ongoing euro-zone debt problems. On the New York Mercantile Exchange, light, sweet crude futures for delivery in February traded at $103.27 a barrel at 0701 GMT, up $0.05 in the Globex electronic session. February Brent crude on London's ICE Futures exchange rose $0.06 to $113.76 a barrel. Rising tensions between Iran and the West and a recent string of upbeat manufacturing indicators around the globe have been the main driving forces behind the rally, but "you never know what kind of negative surprises Europe will throw at you," said a sales trader at GS Caltex. In a latest sign of Spain's deepening financial crisis, the regional government of Valencia Wednesday said it was a week late in repaying a EUR123 million debt to Deutsche Bank. "The outlook for oil demand does look brighter as Asian economies continue to outperform, while the U.S. shows signs of stronger recovery, but Europe's debt crisis is more than capable of hurting the global economy as a whole," the trader added. Some analysts said the risk for oil prices is skewed to the upside in 2012, as fundamentals are still bullish, with supply conditions possibly tighter than previously expected. Ric Deverell, Credit Suisse's director and head of global commodities research, said at a media briefing in Singapore that crude inventories in Europe are very low, while consumption in non-OECD countries isn't slowing--despite higher crude prices. Also, any future ban by EU on use of Iranian crude oil can result in a supply tightness in the interim, but it will also increase China's bargaining power, Deverell said. Nymex reformulated gasoline blendstock for February--the benchmark gasoline contract--fell 67 points to $2.7785 a gallon, while February heating oil traded at $3.0866, 33 points lower. ICE gasoil for January changed hands at $970.75 a metric ton, up $6.00 from Wednesday's settlement. -By Ga-Woon Philip Vahn and Surabhi Sahu , Dow Jones Newswires; +65-64154149; philip.vahn@dowjones.com

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