UPDATE 1-Brent holds steady above $113 on positive U.S. data

* U.S. business spending data boosts oil

* Investors await outcome of Fed policy meeting

* Coming Up: Weekly API oil inventory data

(Adds details, updates prices)

SINGAPORE, Jan 29 (Reuters) - Brent crude held steady above $113 on Tuesday on hopes that economic growth might be picking up in the world's largest oil consumer after a gauge of planned U.S. business spending rose in December, adding to recent positive global economic data.

But traders remained cautious ahead of a U.S. monetary policy meeting and economic reports out of the United States and China this week.

Brent crude edged up 14 cents to $113.62 a barrel by 0602 GMT, while U.S. crude rose 34 cents to $96.78.

Markets were waiting for trading cues from the Federal Open Market Committee meeting on Wednesday and payroll data due on Friday, said Tetsu Emori, a commodities fund manager at Astmax Investments in Tokyo.

"I don't think there's much downside risk," he said. "I think economic data out of the United States has improved, so I don't think there are any negative factors in the market."

Risk appetite has been improving after a raft of positive global economic data and Monday's business spending data from the United States helped reinforce the belief that a recovery was taking root.

The Federal Reserve, whose policy-setting panel concludes a two-day meeting on Wednesday, has said it expects to keep short-term interest rates exceptionally low to help support the economy.

U.S. nonfarm payroll figures on Friday are likely to show the jobless rate unchanged in January and that the U.S. economy created 155,000 jobs, the same as in December, according to economists polled by Reuters.

MIDDLE EAST TENSION

Persisting tension in the Middle East and Africa also supported oil. Iran said on Monday it had launched a live monkey into space, seeking to show off missile systems that have alarmed the West because the technology could potentially be used to deliver a nuclear warhead.

Suspected Islamist militants attacked an oil pipeline in northern Algeria, killing two guards and wounding seven other people, a security source told Reuters.

In Egypt, thousands of protesters ignored a curfew to take to the streets in cities along the Suez canal, defying a state of emergency imposed by Islamist President Mohamed Mursi to end days of violence that has killed at least 51 people.

But, OPEC Secretary-General Abdullah al-Badri said the world oil market should remain well supplied in 2013 and that the OPEC does not need to trim back its oil output.

GASOLINE PRICES HIGHER

Oil prices continued to be underpinned by the closure of Hess Corp's New Jersey refinery, news of which boosted gasoline futures by more than 2 percent on Monday.

The loss of the plant, the latest in the region to fall victim to poor profits, tightened the supply outlook for the Northeast, which is likely to have to rely more on imports and supplies from the Gulf Coast, according to analysts.

"As US refiners typically build up stocks over spring to meet peak summer demand, the closure of this refinery is supporting ideas that the supply of gasoline in the summer could tighten," ANZ analysts said in a note on Tuesday.

Traders are now eyeing data on U.S. crude and oil products stockpiles for clues on demand.

A Reuters survey, taken ahead of weekly inventory reports from industry group the American Petroleum Institute and the U.S. government's Energy Information Administration, forecast that crude stocks had risen by 2.6 million barrels on average for the week ended Jan. 25. Gasoline inventories were forecast to have increased by an average 100,000 barrels for the week.

(Editing by Clarence Fernandez and Himani Sarkar)