* Euro falls on European sovereign debt problem worries
* Gold steady after rising to record highs
* Investors on edge because of turmoil in Middle East
(Adds bullet points)
By Sugita Katyal
SINGAPORE, March 9 (Reuters) - Oil prices fell for a second
day on Wednesday as OPEC considered raising production, pushing
up Asian stocks, although investors remained on edge because of
the turmoil in the Middle East.
The euro fell as worries about European sovereign debt
problems intensified following Moody's credit rating downgrade
for Greece on Monday.
European shares were set to fall on Wednesday after gains in
the previous session, with a Portuguese bond auction likely to
be in focus as jitters about the euro zone sovereign debt crisis
resurface.
Financial spreadbetters expected Britain's FTSE 100
to open down 14 to 20 points, or as much as 0.3 percent,
Germany's DAX to open 4 to 8 points lower or as much as
0.1 percent, and France's CAC-40 to open down 6 to 8
points or as much as 0.2 percent.
Benchmark U.S. crude futures dipped to $104.44 a
barrel, easing further from a 2-1/2 year high hit on Monday,
after Kuwait's oil minister said the Organization of the
Petroleum Exporting Countries (OPEC) was considering boosting
supply to offset disruptions in Libya, where government forces
are trying to quash a popular uprising.
Brent crude declined for a third day to stand at
$112.56 a barrel at 0544 GMT, more than $7 below a 2-1/2 year
high of almost $120 reached on Feb. 24.
An official oil output increase by OPEC would signal the
group's determination to cap prices, but unrest in the region
has fuelled concerns about more supplies being cut off.
"Oil has stopped rising for now, but it hasn't really
retreated to levels that allow aggressive buying in risky
assets, so investors will still be jittery," said Hiroichi
Nishi, general manager at Nikko Cordial Securities.
Japan's Nikkei extended gains for a second day after the
pullback in oil prices lifted Wall Street but investors remained
worried that high fuel prices could stunt global economic growth
and erode corporate earnings.
The benchmark Nikkei share average closed up 0.6
percent, while the broader Topix gained 0.5 percent.
MSCI's index of Asia Pacific shares outside Japan
edged up 0.1 percent, led by gains in consumer
durables and financials.
The Korea Composite Stock Price Index (KOSPI) ended
up 0.3 percent, with banks surging ahead of the central bank's
interest rate meeting on Thursday.
The Bank of Korea is expected to raise rates to curb price
pressures after surprising markets by leaving rates unchanged in
February.
EURO SLIPS
The euro fell for a third straight session against the
dollar, with further pressure likely as investors remained
unconvinced that a European Union summit on Friday to overhaul
the euro zone economies will yield any results.
Concerns about Europe's debt problems have been on the rise
since Moody's cut Greece's credit ratings by three notches on
Monday, signalling more downgrades are on the way and adding to
fears that Athens will have to restructure its debt.
Failure to break through resistance above $1.40 prompted
investors to trim long euro/dollar positions, sending the common
currency to a low around $1.3860 overnight.
With the euro on the back foot, the dollar rose against a
basket of major currencies. The dollar index inched up to
76.776, pulling away from a four-month low of 76.124 set on
Monday.
U.S. stocks rallied on Tuesday as crude prices retreated.
The Dow Jones industrial average rose 1 percent, while
the Standard & Poor's 500 Index gained 0.9 percent.
Gold steadied on Wednesday after rising to record highs as
the prospects of further unrest in oil-rich Middle Eastern
countries has driven investors to seek safe-haven assets.
Gold eased below $1,430 an ounce, falling further from
Monday's record high after the drop in oil prices eased some
concerns about inflation. Spot gold was at $1,425.20 an
ounce.
(Writing by Sugita Katyal; Editing by Alex Richardson)
