* Coming Up: U.S. EIA petroleum status report; 1530 GMT (Updates previous SINGAPORE, recasts throughout, adds quotes)
By Shadia Nasralla and Simon Falush
LONDON Dec 5 (Reuters) - Brent crude oil rose above $110 a barrel on Wednesday after two sessions of losses, as investors switched their focus from fears of a U.S. fiscal crisis to hopes that growth in top energy consumer China will pick up sooner than expected.
Front-month Brent futures traded 48 cents higher at $110.32 by 0928 GMT, after losing nearly 1 percent in the previous session. U.S. crude added 42 cents to $88.92.
China will make policies more targeted in 2013 to help the economy recover and to bolster domestic demand, state television quoted Chinese Communist Party chief Xi Jinping as saying on Tuesday, driving the region's stocks and commodity prices higher.
"Chinese sentiment is pulling markets in general higher and this is due to the statement from the new Chinese leadership with regards to maintaining a stable environment during 2013," said Filip Petersson, analyst at SEB in Stockholm.
"We have movement in the Brent market that's similar to the movement in European equities and U.S. equities futures this morning."
Asian shares also rose to a 16-month high, led by surging Chinese stocks on hopes for stable growth, while copper rose to a near seven-week high.
U.S. STILL IN FOCUS
Brent, however, was still well below Monday's high above $112 per barrel.
Gains were limited by worries that any delay in an agreement to avert a fiscal crisis in the United States may push the world's top oil consumer into recession, darkening the outlook for world oil demand.
Obama and Republican lawmakers are locked in a battle over measures to avert the so-called "fiscal cliff" at the end of the year, a program of $600 billion of spending cuts and tax increases.
The absence of such a deal could cut global oil demand by about 0.6 million barrels per day, JP Morgan analysts estimated in a report this week.
" We've seen months of these discussions going back and forth," Petersson said, adding demand worries connected to the debates have limited effects today.
"We'll have to wait until there is something on the table that people can have a serious discussion about."
MIDDLE EAST TENSIONS SUPPORT
Political and civil unrest in Egypt and Syria and a running dispute between Iran and the U.S. threaten to disrupt exports from the Middle East, triggering worries about supply.
"Anything to do with the Middle East will underpin prices, but the big concern at the moment is the continuing tension with Iran," said Ben Le Brun, market analyst at OptionsXpress in Sydney.
Iran, embroiled in a dispute with the U.S. over its nuclear program, said on Tuesday it had captured a U.S. intelligence drone in its airspace, but the White House said there was no supporting evidence.
An inventory report showed that total U.S. stockpiles dropped by 2.2 million barrels in the week to Nov. 30, beating analyst forecasts for a 300,000 barrel drawdown, data from the American Petroleum Institute showed.
The Energy Information Administration (EIA) will release its weekly data later on Wednesday. (Additional reporting by Ramya Venugopal in Singapore; Editing by Alison Birrane)
