UPDATE 1-Brent rises above $111 on Syria, U.S. data
* Syria-U.S. tensions rise on suspected chemical weapons attack
* U.S. home data temper expectations of Fed tapering
* Investors trim bullish U.S. oil bets for 4th week in a row - CFTC
SINGAPORE, Aug 26 (Reuters) - Brent crude extended gains above $111 a barrel on Monday to a near five-month high as rising tensions over a suspected chemical weapons attack in Syria added to concerns of increased unrest in the Middle East that could disrupt supply.
Oil prices also gained alongside equities after a steep drop in U.S. new home sales on Friday tempered expectations the Federal Reserve will soon reduce stimulus.
"The oil market is heading to an upside due to geopolitical risks in the Middle East and positive equity markets," said Tetsu Emori, a commodities fund manager at Astmax Investment in Tokyo.
Brent crude for October touched $111.68, the highest since April 2 and was at $111.29 a barrel, up 25 cents, by 0400 GMT.
U.S. crude for October delivery rose 60 cents to $107.02 after a 1 percent drop last week.
Brent has risen in the past two weeks on tighter supply due to disrupted output, spanning from the North Sea to Libya, while positive economic data from the euro zone and China last week improved the outlook for fuel demand.
"Europe is recovering and China has probably hit bottom already. That should support prices," Emori said, adding that he expects U.S. crude and Brent to rise to at least $115 and $120 a barrel, respectively, by the end of this year.
In the Middle East, Egypt has seen its bloodiest civil unrest in 60 years while the government of President Bashar al-Assad in Syria is suspected of having launched a chemical weapons attack on its own people. Libya is grappling with regional unrest that has blocked its ports, the worst disruption to its oil sector since the 2011 civil war.
U.N. weapons experts will inspect on Monday a site where poison gas killed many hundreds of people in Damascus suburbs, amid calls from Western capitals for military action to punish the world's worst apparent chemical weapons attack in 25 years.
In the United States, hedge funds and other money managers continued to unwind a record net long position they had built in U.S. oil in July, regulatory data showed. The bullish bets were trimmed for the fourth week in a row in the seven days to Aug. 20.
(Editing by Richard Pullin and Muralikumar Anantharaman)