* Wall Street performance helps bolster crude prices
* Euro zone debt crisis stokes risk aversion
* Coming Up: API oil inventory data, Tues 4:30 p.m. EDT (Recasts, updates prices, market activity, updates headline)
By Edward McAllister
NEW YORK, Sept 12 (Reuters) - Brent crude oil rose in choppy trade on Monday as U.S. equity markets pared losses, outweighing concern about Europe's debt crisis.
Brent fell earlier on worries that Greece may default on its debt, but rose with U.S. crude as Wall Street bounced of its lows.
"It looks like a bit of a short-covering rally spurred on by equities not getting decimated today. Oil traders are responsive to that," said Richard Ilczyszyn, senior market strategist at MF Global in Chicago.
Brent futures
Wall Street at one point was nearly flat on Monday as European bank shares recovered after early losses and technology stocks regained their footing. [.N]
Worries increased that Greece may default on its debts after finance ministers of the Group of Seven (G7) industrialized economies pledged a joint response to the slowdown but offered nothing specific to help their economies. [ID:nN1E78728T]
The spread between WTI and Brent crude narrowed to below
$25 after closing at $25.53 on Friday
OPEC CUTS FORECAST
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Take A Look on G7 meeting: [ID:nL5E7K61TC]
For a 24-hour technical outlook on oil:
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China's oil demand coverage: [O/CNDEMAND]
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The Organization of the Petroleum Exporting Countries cut its forecast for global oil demand growth next year because of a worsening economic outlook and said a disappointing U.S. economic performance could further weigh on fuel use.
OPEC said in a report world oil demand would rise 1.06 million barrels per day (bpd) in 2011, 150,000 bpd less than that expected last month. The growth estimate for next year was lowered by 40,000 bpd to 1.27 million bpd. [ID:nL3E7KC2CU]
Investors were also looking at data that showed China's implied oil demand in August slipped to its lowest rate this year as maintenance and accidents cut into refinery production.
Fuel consumption in the world's No.2 user has been losing steam since May, with growth easing from the double-digit pace seen since last year as higher crude costs have squeezed refining margins and Beijing's credit tightening cut into fuel spending.
Still, on a year-on-year basis, China's oil use expanded 7.8 percent, Reuters calculations based on preliminary government data showed on Saturday. [ID:nL3E7K928K]
Concern eased regarding damage to U.S. Gulf oil infrastructure after Tropical Storm Nate made landfall in central eastern Mexico. Also, no other major weather disturbances expected to affect the hydrocarbon-rich region in the short term.
Nate weakened to a tropical depression on Sunday as it moved further inland after cutting Mexican oil production by 178,800 barrels a day as of Friday. Mexico's Dos Bocas port re-opened to shipping on Sunday, but the crude-exporting hub of Cayo Arcas remained closed. [ID:nS1E78A01P]
Oil markets also eyed production and exports of Libyan crude following the country's power transition. Libyan oil firm Arabian Gulf Oil Company said on Monday it restarted production at the eastern oil field of Sarir in an early sign the industry is coming back to life. [ID:nL5E7KC16E] (Additional reporting by Christopher Johnson in London and Alejandro Barbajosa in Singapore; Editing by Andrea Evans and Bob Burgdorfer)