* Politics in Spain, Italy worry investors
* Strong dollar, mixed U.S. data add to pressure
* Coming Up: API weekly crude stocks; 2130 GMT
By Ramya Venugopal
SINGAPORE, Feb 5 Brent crude slipped towards
$115 per barrel on Tuesday, giving up some of its gains from the
last three weeks, on renewed euro zone worries and a slightly
The outlook for oil demand dimmed as fresh political
uncertainty in Spain and Italy threatened to disrupt the euro
zone's efforts to resolve its debt crisis. Adding to worries, a
gauge of business investments in the United States edged lower,
eroding the confidence from last week's data.
"The oil markets are taking a breather after the recent
gains, and are likely to consolidate around these levels as
other markets are also tumbling," said Ker Chung Yang, senior
investment analyst at Philips Futures Pte.
"The main concern at the moment is Europe and U.S. economic
data has also been mixed."
Brent fell 42 cents to $115.18 per barrel at 0737
GMT, after shedding nearly 1 percent in the previous session.
Brent, which hit a more than four-month high above $117 on
Friday, has gained for the last three weeks.
U.S. crude slipped 18 cents to $95.99 per barrel,
after losing 1.6 percent on Monday. It gained for the last eight
weeks, the longest winning streak since 2004.
But, trading volumes may be lower this week as major Asian
markets are heading into the Chinese New Year holiday.
Asian shares eased and the euro was on the defensive as the
political uncertainty in Italy and Spain prompted traders to
EURO ZONE WOES
Investors turned their focus to the euro zone as the
political developments in Spain and Italy dented optimism that
Europe was slowly healing from its debt crisis.
In Spain, the opposition Socialist Party called for the
resignation of Prime Minister Mariano Rajoy over a corruption
scandal as a poll showed the lowest support on record for his
centre-right People's Party.
The scandal has provoked fury among Spaniards already
disenchanted by deep recession and high unemployment, as support
for the two biggest parties slumps.
"Ultimately the possibility of a Spanish election could at
this stage lead to significant destabilisation of the delicate
euro zone reform alliance," said Ric Spooner, chief markets
analyst at CMC Markets in Sydney.
In Italy, chances of former prime minister Silvio Berlusconi
regaining power raised worries about Rome's ability to fix its
Berlusconi, a top candidate in this month's election, is
seeing a resurgence in popularity, threatening reforms
implemented by the technocrat government.
A strong dollar, partly boosted by a weak euro and a
pressured Japanese yen, also weighed on oil prices.
Adding to market pressure was data from the U.S. Commerce
Department that showed overall factory orders for December were
below economists' expectations.
Traders are now waiting for U.S. crude inventory data for
clues on demand from the world's top oil consumer. U.S.
commercial crude oil stockpiles were expected to have risen last
week on higher imports and lower refining activity, a
preliminary Reuters poll of four analysts showed on Monday.
Industry group American Petroleum Institute (API) will
release its report on Tuesday while the U.S. Department of
Energy's Energy Information Administration (EIA) will issue its
report on Wednesday for the week ended Feb. 1.
Oil prices also came under pressure as sanctions-hit Iran
said it was open to a U.S. offer of direct talks on its nuclear
programme and that six world powers had suggested a new round of
nuclear negotiations this month. However, Iran did not commit to
(Editing by Himani Sarkar and Ed Davies)