SINGAPORE: Brent crude fell towards $107 a barrel on Tuesday as investors locked in profits after recent sharp gains to a three-month top, while easing worries about supply from the Middle East also weighed on prices. Oil saw its biggest weekly rise in a year last Friday as concerns mounted that tensions in Egypt could disrupt traffic through the Suez Canal, via which a major portion of the world's oil is shipped. But prices have come off on indications that some stability could return to the Arab world's biggest country. "The prices have tracked so much higher in the past few weeks because of firstly the Syrian civil war escalation and then the Egyptian crisis," said Vyanne Lai, an economist at National Australia Bank. "So oil prices have built up to a point that, unless there are more major news about intensifying Middle East conflicts, you're likely to see some form of correction." Brent fell 11 cents to $107.32 by 0646 GMT, after slipping to a session low of $106.90 earlier and off Monday's three-month peak of $108.04. US crude gained 10 cents to $103.24, recovering from a low of $102.71. Easing supply worries after news that Egypt's interim head of state had set a speedy timetable for elections to drag the country out of crisis, together with announced returns of a Libyan oilfield as well as an Iraqi pipeline, weighed on crude prices. But traders said they were still keeping an eye on Egypt, where the military ouster of Islamist President Mohamed Mursi last week sparked a wave of bloody protests. "The Egypt situation is going to continue to be a good support on the oil market with lower side being limited and possible for prices to go higher should there be any disruptions," said Ken Hasegawa, a commodity sales manager at Newedge Japan. CHINA DATA EYED Investors are now waiting for data from China, the world's No.2 oil consumer, that could show growth in the world's second-largest economy grinding towards a 23-year low, according to a Reuters poll. China's annual consumer inflation accelerated more than expected in June to 2.7 per cent as food costs soared, data showed on Tuesday, limiting room for the People's Bank of China to loosen policy to underpin the slowing economy. "The 2.7 per cent is still generally a benign number when in 2010 it went up to much more than that, so I wouldn't think it's something to herald about as fundamentally the Chinese economy is slowing and industrial data recently pointed out to contracting manufacturing and industrial production," Lai said. But US oil prices may be cushioned by an expected 3.3 million barrel drop in stocks in the week to July 5 on lower imports and higher refinery activity, a Reuters poll showed. The benchmark is also drawing support from a rally on Wall Street spurred by strong jobs data last week.

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