RTRS:Oil above $110 on supply woes, euro crisis caps gains
* Surprise decline in U.S. crude, product stocks -EIA
* Asian shares, euro, gold weighed by Spain, Greece debt jitters
* Iran can neutralise sabotage of nuclear facilities -Ahmadinejad (Previous SINGAPORE)
LONDON, Sept 27 (Reuters) - Oil held steady above $110 a barrel on Thursday on renewed worries over supply disruptions from the Middle East, while the escalating debt crisis in the euro zone reinforced concerns about demand and capped gains.
Uncertainty over a bailout for Spain and wrangling over Greece's debt highlighted the difficulty Europe is facing in tackling its problems, weighing on broader markets from Asian shares to the euro and gold.
Comments from Iran about "neutralizing" all efforts to sabotage its nuclear facilities supported oil, however.
Brent crude was up 10 cents to $110.14 a barrel by 0946 GMT, partly recouping the previous session's losses, while U.S. oil gained 25 cents to $90.23.
"The ongoing geopolitical tensions in the Middle East plus the prospect of further injections of liquidity by the central banks make any further decrease unlikely," said a Commerzbank research note.
Iran is under threat of military action from "uncivilized Zionists", a clear reference to Israel, Iranian President Mahmoud Ahmadinejad said in a speech before the U.N. General Assembly.
Oil also gained support from data that showed crude and refined product stockpiles in the world's biggest oil consumer fell unexpectedly last week as crude imports plunged.
Domestic crude stocks declined by 2.45 million barrels to 365.18 million barrels, the Energy Information Administration said, against a forecast increase of 900,000 barrels.
Gasoline inventories dropped by 481,000 barrels to 195.83 million barrels, against expectations of an increase of 200,000 barrels. That in part helped U.S. RBOB gasoline futures jump 11.40 cents, or 3.8 percent, on Wednesday.
The market is now eyeing Spain which will announce a series of economic reforms and a tight 2013 budget on Thursday.
"There is a lot of nervousness built into tonight's Spanish budget, and video footage of out of control riots are not helping to build confidence," Ben Taylor, a sales trader at CMC Markets, said in a report.
"I think the markets will push Spanish Prime Minister Mariano Rajoy's hand into asking for a bailout."
Demonstrators this week clashed with police on the streets of Athens and Madrid in an upsurge of popular anger at new austerity measures being imposed on two of the euro zone's most vulnerable economies. (Additional reporting by Manash Goswami in Singapore; Editing by Catherine Evans)
