* U.S. discusses suspected Syria chemical attack with allies * Libya's oil production down by nearly 60 percent * Weak U.S. data tempers view on Fed tapering * Coming up: U.S. API weekly oil data; 2030 GMT (Updates prices, adds quote) By Peg Mackey LONDON, Aug 27 (Reuters) - Brent crude rose to $112 a barrel on Tuesday, nearly a six month high, as rising tension over a suspected chemical weapons attack on civilians in Syria raised the prospect of Western military action in the Middle East. The United States and its allies have met in Jordan for what could be a council of war should they decide to punish Syrian President Bashar al-Assad, who has denied using chemical weapons and blamed rebels for staging such attacks. Brent crude was trading up $1.27 at $112 by 1052 GMT, its highest since early March. U.S. crude rose $1.03 to $106.95 a barrel, after falling 0.5 percent the previous day as data showed U.S. durable goods orders had dropped the most in nearly a year. Unrest in the Middle East, which pumps a third of the world's oil, has supported Brent crude as investors fear crises in Syria and Egypt could spill over to the rest of the region and disrupt oil supply. "Syria is not a major oil producer (as was Libya), nor is it a major transit point for oil and gas exports (as is Egypt)," said Julian Jessop, head of commodities research at Capital Economics. "Instead the concern is the risk that Western intervention in Syria could prompt a wider regional conflict, given the support that Iran has provided to the Assad regime." The United States put Syria's Assad on notice on Monday that it believes he was responsible for using chemical weapons against civilians last week in what Secretary of State John Kerry called a "moral obscenity." Also supporting oil, Libyan production has dropped to 665,000 barrels per day (bpd) - or nearly 60 percent - due to a month-long disruption by armed security guards who shut down main export terminals, the country's oil minister said on Tuesday. In the United States, weak data on home sales and durable goods orders tempered views that the Federal Reserve could start paring its economic stimulus programme as soon as September. The American Petroleum Institute will later on Tuesday release its weekly oil stocks data. A preliminary Reuters poll showed that U.S. commercial crude stockpiles were expected to have fallen last week as refinery utilisation rates were at high levels, and gasoline inventories likely dipped primarily due to seasonal factors. (Additional reporting by Florence Tan in Singapore; editing by Keiron Henderson)

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