By Emma Farge
LONDON, Feb 19 (Reuters) - Brent crude held near $117 per barrel on Tuesday after falling in the last three sessions as traders eyed lacklustre European growth and waited for U.S. data to provide demand clues for the world's largest oil user.
Forecasts for a slowdown in France's GDP growth in 2013 and elections in Italy have added to uncertainty on the euro zone outlook, curbing investors' appetite for riskier assets like oil.
Brent crude for April delivery slipped 2 cents to $117.36 a barrel by 1043 GMT. U.S. crude for March fell 41 cents from Friday's close to $95.45.
There was no settlement for U.S. crude futures on Monday due to a holiday in the United States.
'The caution might be a bit sharper in oil, as we had quite a bit of a run-up and the market is vulnerable to bad news at the moment,' said Ric Spooner, chief markets analyst at CMC Markets in Sydney, pointing to rising wariness among investors in risk markets.
Brent speculators reduced their net long positions from a record high in the week to February 12 in a sign of investor wariness.
Brent is nearly $2 off a 9-month high of $119.17 hit earlier in February on a price run-up spurred by economic recoveries in the world's top two oil consumers, the United States and China, and higher demand forecasts from the U.S. Energy Information Administration and OPEC.
Andrey Kryuchenkov of VTB Capital identified a large risk premium of around $10 a barrel in the Brent price linked to Middle Eastern tensions over Iran's disputed nuclear programme.
Investors are expected to eye the next round of nuclear talks between major powers and Iran next week. Sanctions on the OPEC producer have reduced its oil exports, which could have fallen below 1 million barrels per day (bpd) in January, according to estimates from the International Energy Agency (IEA).
'The political risk premium is overblown so Brent won't get any higher unless something happens in the Middle East. People will probably take profits this week,' he said.
Volumes were thin in early trade on Tuesday and could pick up later on Tuesday as U.S.-based traders place bets ahead of the release of two sets of U.S. oil inventories data, delayed by a day to Wednesday and Thursday.
Housing data from the United States later this week could also provide signs on its economic health.
Technical charts point to lower prices in the absence of fresh data that could sway the market.
Brent oil is expected to fall into a range of $111.97 to$113.67 per barrel over the next four weeks, similar to a downtrend between March and June last year, Reuters markets analyst Wang Tao said.
A technical analysis of the U.S. crude price chart showed it was in a potential double top formation, a bearish signal, and could break below a support level of $94.90, Spooner said.
Even though a lot of money has been poured into the two oil contracts last month, they have failed to rise and stay above key resistance levels, Stephen Schork, president of the Schork Group in Villanova, Pennsylvania, said.
'Should the bullish month that has accumulated over the last four weeks tire, then it has no other place to go but to test resistance to the downside,' Schork said in a note.
'With a significant geopolitical risk premium currently priced in, we feel that some downside is warranted, unless there is a significant escalation in Middle East North/Africa tensions,' Marc Ground, a commodities analyst at Standard Bank, said in a note.
(Additional reporting by Florence Tan; editing by Keiron Henderson) Keywords: MARKETS OIL/
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