SINGAPORE: Brent futures eased towards $107 a barrel on Monday as concerns over a slowdown in China stoked demand-growth worries, but bitterly cold weather across the northern Hemisphere and simmering tensions in the Middle East curbed losses. Emerging markets came under pressure as the US Federal Reserve looked set to continue tapering its stimulus and as tighter credit conditions in China raised fears of a slowdown, hammering most risk assets including base metals and Asian shares. Yet expectations the West will pick up the slack in China's slowing oil demand-growth meant losses in crude futures were limited. Brent crude had slipped 32 cents to $107.56 a barrel by 0740 GMT, after settling 30 cents higher. US oil gained 22 cents to $96.86, having ended 68 cents lower. "Overall, the fundamental scenario for oil is not so bad because you have recovery in the United States and Europe possibly making up for the slowdown in China," said Tony Nunan, oil risk manager at Mitsubishi Corp in Tokyo. "But will we have to go through another crisis of a contagion across emerging markets? That's the thing in everybody's mind now." China's economic growth will slow gradually over the next two years, a Reuters poll showed. Growth for 2014 may come in at 7.4 percent, according to the median forecast. That would mark the slowest expansion for the economy since 1990. "The government is doing the right thing, but China is a bit of a double-edged sword," said Nunan. "If you press the pedal too hard, you risk creating a bubble. If you take it off a bit, there is risk of a slowdown." Fed officials are seen cutting bond-buying by another $10 billion at their regular two-day policy meeting beginning on Tuesday, and are likely to remain unfazed by the ongoing rout in emerging markets. "If further tapering were to occur, the US-denominated crude is likely to suffer in the short-term due to the strengthening in the greenback," analysts at Phillip Futures said in a note. However, long-term prospects will be positive as it underpins recovery in the US economy, suggesting higher demand for the commodity." Support For Oil Around this time of the year as peak winter season demand ebbs and refineries go in for maintenance, oil should typically come under pressure, Nunan said. But the severe cold spell in the United States, Europe and Japan means that Brent may trade between $106 and $108 a barrel for the week, he said. If Brent breaks past the $108 mark, it may trade between $108 and $109, Nunan added. The US benchmark will swing in a $96-$98 range. If the top of the range is breached, it may trade between $98 and $99, he said. Prices are also drawing support from lingering worries of a worsening geopolitical crisis in the Middle East. In addition to monitoring progress of talks between world powers and Iran to end a decade long nuclear dispute, investors are also worried of a headlong collision across Middle East fault lines as Turkey, Iraq and ethnic Kurds, who run their own region in-between, wrangle over oil exports. "(The Middle East) is on a slow boil and every once in a while it will come to the forefront," Nunan said.

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