(Reuters) - Brent crude held steady above $109 on Friday, after recovering in the previous session on optimism policymakers will move closer to resolving the euro zone's debt crisis at a meeting this weekend and stem any slowdown in oil demand. France and Germany said European leaders would examine in detail a global solution to the crisis on Sunday and aim to adopt the plan on Wednesday at the latest. Asian shares inched up, while the euro clung to gains and copper rose from its largest one-day collapse in four weeks in the previous session. Brent crude fell 26 cents to $109.50 a barrel at 0707 GMT, after rising to as much as $110. U.S. oil gained 22 cents to $86.29 a barrel. "If we see some solid agreement on the debt crisis, then we may see Brent rising to $114, a technical resistance level," Caren Seren Varol, a risk manager at Global Risk Management said. "If there is no agreement, we may see prices fall all the way down to the $103-$104 level." Brent is poised to fall 2.6 percent this week, after rising for the past two, and inching closer to the 2.8 percent decline of the week ended September 30. U.S. oil looks set to slip 1 percent this week, after rising 5.3 percent in the last one. The decision to hold another meeting for European leaders to definitively adopt the plan is giving investors some hope that policymakers will be able push through measures to contain the euro zone's debt issue, said Ken Hasegawa, a commodities derivatives manager with Newedge Brokerage in Tokyo. But investors are also worried as deep divisions between France and Germany may mean there will be scant progress on strengthening the euro zone bailout fund. The major sticking point is over how to scale up the European Financial Stability Facility (EFSF), a 440 billion euro ($600 billion) fund so far used to bail out Portugal and Ireland. France and Germany disagree over the best way to bolster the facility, with Paris fearing its triple-A credit rating could come under threat if the wrong method is chosen. "The market will trade in a very narrow range, between $84 and $88 a barrel for U.S. crude till the outcome of the summit is known," said Hasegawa. "Nobody is willing to take positions at this point." Brent will remain neutral in a range of $106.96-$110.30 per barrel, Reuters technical analyst Wang Tao said. PRICE OUTLOOK Oil prices rose in the previous session, bucking a broader sell-off across commodities. The 19-commodity Reuters-Jefferies CRB index .CRB settled down 1 percent as cotton, cocoa and coffee joined a plunge led by copper. Oil gained mostly because prices have been tracking equities and news from the European Union, while fundamentals are driving copper and other commodities, Varol said. Expectations of a colder winter in the United States, which helped push U.S. heating oil futures higher, were also supporting crude prices. A strengthening La Nina in the world's top oil consumer this winter will cause colder and wetter weather to the North and drier and warmer conditions in the South, government forecasters said. U.S. inventories of both crude and products dropped below their five-year averages, Barclays Capital said. "The surplus has gone, with inventories having fallen almost 1 million barrels a day over the past month relative to the normal seasonal pattern and the latest week showing a decline of 1.8 mb/d relative to the five-year average," Barclays Capital said in a report. Participants also weighed in news of former Libyan leader Muammar Gaddafi's death, with most saying the announcement meant very little to the oil market.

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