By Alejandro Barbajosa SINGAPORE (Reuters) - Oil rose by as much as $1 as a weaker dollar rekindled some of the appeal of commodities and concern about Europe's deteriorating debt crisis eased temporarily. Brent added 61 cents to $112.86 by 0433 GMT after touching $113.30, having dropped 11 percent from this year's April peak above $127. U.S. crude climbed 81 cents to $89 a barrel, off an earlier high of $89.21. Asian stocks steadied and the euro held above a seven-month low against the dollar on Tuesday, after a report that Italy may get financial support from China lifted Wall Street in late trade but did nothing to ease fears that Europe is descending into a banking crisis. Traders were wary about the modest oil rally as markets remain prone to swings in risk appetite, with policy makers struggling to reassure investors Greece can stay afloat. "This is a shallow bounce because of Wall Street ending higher, so there is some confidence returning, but I don't think anybody would be putting any big positions given the global situation," said Victor Say, an analyst at Informa Global Markets in Singapore. "You never know what is going to blow up in Europe next." U.S. crude futures rose on Monday, propped up by spread trading with Brent crude, which slid on concerns the euro zone debt crisis could weaken Europe's economy and dent oil demand. On Tuesday, the dollar weakened about 0.7 percent against a basket of currencies, restoring some of the shine of commodities as an alternative investment. Continued...

Source