UPDATE 5-Oil rises above $112 as investors watch Syria
* Investors wait to see if diplomacy averts attack on Syria
* OPEC members say oil market well supplied
* Federal Reserve moves next week also awaited
* IEA sees market easing as oil supplies improve in next few months
LONDON, Sept 12 (Reuters) - Global oil prices rose above $112 a barrel on Thursday as investors waited to see if diplomatic efforts to eliminate Syria's chemical weapons would avert a U.S. strike that could further disrupt Middle East supplies.
Political unrest had already seen Libya's oil output plunge to a tenth of usual production and exports fall to about 80,000 barrels per day earlier this month, pushing up oil prices.
While Syria is not a major oil producer, concerns had mounted that a wider conflict could spill over to key exporting countries or disrupt shipping routes.
But the International Energy Agency (IEA) said on Thursday global oil supply should improve in the next few months as a rise in Saudi production had helped compensate for Libyan losses while demand was likely to ease as refineries go into seasonal maintenance.
Benchmark Brent crude oil for October rose $1.07 to $112.57 during the session by 1424 GMT. U.S. crude rose $1 earlier but pared gains to trade about 73 cents up at $108.29 by 1424 GMT. Brent had scaled six-month highs of $117.34 a barrel on Aug. 28, partly on rising Syrian tensions.
"Brent... is staying where it is right now. Syria is priced in. There will be no military strike now but it is not off the table completely and that is supporting the downside," said Carsten Fritsch, oil analyst at Commerzbank.
"Libya is down but Saudi Arabia says it can meet any demand... So you have bullish and bearish news balancing each other out at the moment."
Diplomatic efforts to place Syria's chemical weapons under international control have intensified this week.
U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov will meet later on Thursday in Geneva to discuss how to deal with Syria's arsenal.
DEMAND EBBS, EYES ON FED
Gasoline stocks rose last week, data from the U.S. Energy Information Administration showed on Wednesday, suggesting that demand supported by the summer driving season had ended.
In addition, several members of the Organization of the Petroleum Exporting Countries (OPEC) said at an industry event in Seoul that the oil market was well balanced and there was no need to pump more for now.
But the end of seasonal oilfield maintenance in the North Sea and the Gulf of Mexico would bolster supply in the last quarter of this year, while North American output continued to surge.
U.S. oil major Exxon Mobil will export the first ever crude cargo from the giant Kashagan field in Kazakhstan at the end of October, adding to global supplies.
Expectations are growing that the U.S. central bank will decide next week to begin reining in its monetary stimulus, although last Friday's disappointing U.S. jobs data has convinced many economists that any reduction might be smaller than some had believed.
Still, any cut in the Federal Reserve's bond-buying programme would likely boost the dollar and pressure oil and other commodities priced in the greenback.
(Additional reporting by Yuka Obayashi and James Topham; editing by James Jukwey)