LONDON, Oct 25 (Reuters) - Brent was steady above $111 on Tuesday as concerns over Europe's economic health kept prices in check, while U.S. oil rose for a third straight day to hit a fresh three-month high.
Brent crude futures LCOc1 edged up by 48 cents to $111.93 a barrel at by 1042 GMT, flipping between positive and negative territories.
U.S. crude CLc1 was trading up $2.18 at $93.43 after hitting $93.70, the highest intraday price since early August.
"The real economy in Europe is not that strong," said Masaki Suematsu, a broker at Newedge in Tokyo.
Brent is prone to dip, said Christopher Bellew, a broker with Jeffrey Bache, citing technical factors.
"In the very short term, it is in a range of $108/$112 for front month Brent," Bellew said.
"It is close to the top of the range now and maybe it is time for a pull back."
But the fall in Brent crude prices was limited by relatively strong corporate earnings.
Oil and gas firm BG Group and Deutsche Bank (DBKGn.DE: Quote) beat forecasts, helping underpin European shares.
The FTSEurofirst 300 index of leading European shares was flat.
Out of the 142 companies in the S&P 500 that have reported quarterly earnings through Monday, 68 percent have topped Wall Street estimates, according to Thomson Reuters data.
EU leaders are to meet on Wednesday with tentative plans in place for Greece's debt to be reduced, European banks to be recapitalised and the euro zone's rescue fund, or EFSF, to be increased to provide partial insurance for sovereign bonds.
But the agreements and how far they go remain under discussion.
Despite widespread expectations of an economic slowdown, Brent crude oil prices are forecast to stay well above $100 per barrel, a Reuters poll showed on Tuesday.
A Reuters poll of 35 analysts showed Brent crude averaging $106.80 per barrel next year and $108.60 in 2013 as demand for fuel from China and emerging economies keeps the global oil market tight.
U.S. crude is forecast to average $92.00 a barrel in 2012 and $99.50 in 2013.
U.S. crude futures were outpacing the rest of the oil futures complex .
On Monday, the prompt December 2011 contract rose above the January contract, flipping into a price structure known as backwardation, which typically reflects tight markets.
It is the first time since October 2008 that the spread between the prompt and second-month contracts closed at backwardation, according to Reuters data. CL-1=R
The discount on U.S. crude against Brent narrowed to as little as $18.70 a barrel, the narrowest since July. CL-LCO1=R
Although the U.S. crude move to backwardation on Monday has so far lacked clear explanation, crude oil inventories have remained below year-earlier levels in the U.S. and Europe.
The market was closely watching U.S. supplies for direction as weekly inventory data from the American Petroleum Institute (API) and the U.S. Energy Information Administration (EIA) will be released on Tuesday and Wednesday respectively.
Analysts forecast an increase of 2 million barrels in U.S. crude inventories, with refined products falling. (Reporting by Seng Li Pen Singapore and Ikuko Kurahone in London; Editing by Alison Birrane)
