RTRS:UPDATE 1-Brent near one-week high above $104 on U.S. data, supply woes
* U.S. housing, consumer confidence numbers fuel demand hopes
* Worsening Syrian conflict adds to supply worries
* Coming Up: API inventory numbers; 2030 GMT (Adds quote, links, details)
By Ramya Venugopal
CHENNAI, India, May 29 (Reuters) - Brent crude futures steadied on Wednesday near a one-week high above $104 per barrel, as upbeat U.S. housing and consumer confidence data sparked expectations of improved demand from the world's top consumer.
Prices were underpinned by worries over Middle East supplies as conflict in Syria worsened. The long-term outlook, however, was weak, on expectations for uncertain demand growth.
"People are starting to realize that the United States has got to lead us out of this economic slump," said Tony Nunan, an oil risk manager at Mitsubishi Corp in Tokyo.
"The main worries are unemployment and housing, and housing seems to be on a steady growth path. That and the geopolitical risk is keeping prices supported."
Front-month Brent futures slipped 13 cents to trade at $104.10 per barrel by 0545 GMT, after rising as much as $2 in the previous session to its highest since May 21. U.S. crude shed 29 cents to $94.72.
Data on Tuesday showed that U.S. home prices accelerated in March by the most in nearly seven years as spring buying gave the sector traction, while surging consumer confidence pointed to a resilient recovery.
Worries about global economic health, particularly after poor manufacturing numbers out of China and fears that the U.S. Federal Reserve may begin scaling back its rally-spurring easy money programme, have weakened oil markets this year.
Brent is down more than 12 percent from this year's high of more than $119 in February, while U.S. crude has lost more than 3 percent from its January high above $98.
"Macro factors remain a headwind for oil prices," Morgan Stanley analysts said in a note.
"However, we continue to see fundamental support for higher prices this summer. In fact, several supply disruptions over the coming weeks should help firm oil markets."
Prices have indeed found a floor because of the worsening conflict in Syria, which has kept concerns simmering over supply from the oil-rich Middle East.
In the latest developments, Britain and France said on Tuesday they did not have to wait until Aug. 1 to arm rebels fighting Syrian President Bashar al-Assad, and Russia said it would not scrap plans to deliver an air defence system to the conflict-ridden nation.
The longer term outlook for oil remains weak, as activity in larger economies such as the United States, Europe and China, has still not picked up enough to spur demand growth.
Technical indicators also point to a drop. Brent is expected to retrace to $103.29 while U.S. crude may drop to $94.07 per barrel , said Reuters technical analyst Wang Tao.
U.S. oil prices may also be supported by crude inventory data that is likely to show commercial crude stockpiles fell for a third consecutive week on lower imports and higher refinery activity, a Reuters poll of 6 analysts showed.
The American Petroleum Institute releases inventory numbers on Wednesday, with figures from the Energy Information Agency due on Thursday. (Editing by Clarence Fernandez)
