* Brent, US crude briefly rise more than $1, then retreat
* Technicals: Brent may rise to $115.22
* Coming Up: API U.S. oil inventory report; 2030 GMT
By Alejandro Barbajosa
SINGAPORE, Sept 13 (Reuters) - Oil tracked equities higher on Tuesday, rising by as much as $1, while a weaker dollar rekindled some of the appeal of commodities as concern about Europe's deteriorating debt crisis eased temporarily.
U.S. crude
Asian stocks steadied and the euro held above a seven-month low against the dollar on short-covering 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 remained 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.
Brent's premium against U.S. crude benchmark West Texas
Intermediate (WTI) narrowed to below $24 on Monday from $25.53
on Friday. It reached a record $27.23 on Sept 6.
POLICY MAKERS ON THE MOVE
U.S. Treasury Secretary Timothy Geithner makes a one-day trip to Poland this week for an unprecedented meeting with euro zone finance ministers as growing fears of a potential Greek debt default rip into Europe's banking sector.
"The European debt, especially the Greek situation, is not bound to go away so soon. That along with the slowing of the global economy, you will see some shrinking on demand, which will weigh on oil prices," said Say.
OPEC cut its forecast for global oil demand growth next year because of a worsening economic outlook and said a disappointing economic performance in top consumer the United States could further weigh on fuel use.
The Organization of the Petroleum Exporting Countries also said concerns were easing about a tight oil supply and demand balance and that it expected Libyan oil output to return to full capacity in less than 18 months, more quickly than some estimates.
World oil demand will increase by 1.06 million barrels per day (bpd) in 2011, OPEC said in the report, 150,000 bpd less than expected last month. The growth estimate for next year was lowered by 40,000 bpd to 1.27 million bpd.
INVENTORIES SUPPORT
Oil prices on Tuesday got some support from an expected drop in U.S. crude inventories, which may have fallen about 3 million barrels last week after Tropical Storm Lee disrupted oil production in the Gulf of Mexico, a Reuters poll showed.
Gasoline inventories were expected to have dipped by 400,000 barrels as the U.S. summer driving season ended, while distillate stocks were forecast to have gained 800,000 barrels.
Industry group the American Petroleum Institute will release its weekly report on Tuesday at 2030 GMT, followed by government figures from the Energy Information Administration on Wednesday.
In other news, Russian oil exports will jump and production rise as a result of changes to energy taxes that will help the world's largest oil producer keep its lead over OPEC heavyweight Saudi Arabia, executives told the Reuters Russia Investment Summit. (Reporting by Alejandro Barbajosa; Editing by Clarence Fernandez)