UPDATE 3-Oil steady below $109, eyes on Mideast, economy
* Mixed economic data, "fiscal cliff" weigh on prices
* Egypt and Iran worries fuel supply concerns
* Coming up: U.S. weekly jobless claims; 1330 GMT
(Updates throughout, changes dateline, previous SINGAPORE)
LONDON, Dec 6 (Reuters) - Brent crude oil steadied below $109 per barrel on Thursday as worries about the global economy and oil demand balanced supply fears stemming from simmering Middle East tensions.
Comments from U.S. President Barack Obama that a deal to avert the so-called fiscal cliff was possible in "about a week" if Republicans compromised on taxes supported prices of riskier assets such as oil.
The United States faces year-end tax hikes and spending cuts that threaten to push the world's largest economy back into recession and dent demand from the world's top oil consumer.
Brent crude was down 7 cents at $108.74 per barrel by 0900 GMT, after dropping for the last three sessions. U.S. crude rose 1 cent to $87.89 per barrel.
Oil faced pressure after a U.S. inventory report showing big builds in oil products with gasoline stocks up by the biggest margin since September 2001, surging 7.86 million barrels to 212.12 million barrels in the week to Nov. 30.
The U.S. Energy Information Administration said U.S. stocks of distillates - diesel and heating oil - also rose at a time of the year when refined oil stocks often fall.
"We saw a sharp decline due to the U.S. inventory report and that is still lingering in the market, keeping prices under pressure," said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt.
"On the other side, we have supply risks due to geopolitical tensions in the Middle East, protecting oil prices to the downside, keeping them hovering at yesterday's low levels."
Tensions in Egypt rose after violent clashes outside President Mohamed Mursi's palace killed five and injured 350 others.
Israel is also in focus with its plans to build more settler homes in the West Bank, prompting the European Union to summon Israel's envoy.
U.S. fears of Syrian President Bashar al-Assad using chemical weapons and Iran saying the United States was spying on the country's military sites and oil terminals added to concerns that supplies from the region could be disrupted.
Washington said there was no evidence to support Iran's assertion.
"Iran will be the next issue that Obama will have to address after the fiscal cliff, so though it's on the back burner now, I expect it to come to the forefront early next year," said Tony Nunan, an oil risk manager with Mitsubishi Corp in Tokyo.
Worries over the global economy moved back into focus after a mixed batch of economic data failed to reassure investors.
Ahead of U.S. monthly non-farm payrolls due on Friday, private payrolls processor ADP reported private-sector employers added 118,000 jobs in November, fewer than expected, though activity in the service sector continued to expand.
Across the Atlantic, data showed euro zone shoppers cut back on spending by the biggest margin in six months in October.
Markets are now eyeing a European Central Bank policy meeting on Thursday for clues on future policy.
(Additional reporting by Ramya Venugopal in Singapore; editing by Christopher Johnson)