* Market to stay range bound ahead of this week's FOMC meet
* Investors watching for U.S. growth outlook, gasoline consumption
* Brent crude to rebound to $115 -technicals
* Coming Up: U.S. API inventory data; 2030 GMT (Recasts, adds comments, updates prices)
By Manash Goswami
SINGAPORE, June 21 (Reuters) - Oil rebounded on Tuesday as losses in the previous session provided a buying opportunity ahead of a key meeting of the U.S. Federal Reserve this week, while a weak dollar also supported the recovery.
Brent
The market may stay range bound ahead of a U.S. Federal Open Market Committee meeting, as participants watch for comments by Federal Reserve Chairman Ben Bernanke on the outlook for growth just as the second phase of quantitative easing measures in the world's biggest economy is supposed to wind down.
"This movement in oil prices has nothing to do with fundamentals," said Ken Hasegawa, a commodity derivatives manager at Japan's Newedge brokerage. "It is being driven by the euro/dollar. Oil is rising with the euro."
The euro clung to small gains as market players bet the euro zone will cobble together a plan to prevent Greece from defaulting on its debt, though its advance could stall ahead of a confidence vote on the government in the Greek parliament.
Brent fell earlier in the day, narrowing its premium to U.S. oil. The sell-off in a key spread between Brent and U.S. futures, which weighed on prices on Monday as well, is because premiums of the North Sea benchmark had gone far too high, analysts said. Brent also fell due to growing uncertainty over demand in Europe as a result of Greece's debt crisis.
"The premium for Brent had just gone too high," said Hasegawa said. "That is why we are seeing the correction. Also, the market is very cautious because of the Greek debt issue."
Euro zone finance ministers gave Greece two weeks from Monday to approve further spending cuts and tax increases in exchange for another 12 billion euros in emergency loans, piling pressure on Athens to get its ragged finances in order.
THREATENS RECOVERY
On the other hand, investors saw an opportunity to snap up U.S. crude futures after they slumped to a four-month low last week. Additional support came from buying ahead of the expiry of the July contract on Tuesday.
"The fall was to a good enough level to prompt buying on the dips," said Tetsu Emori, a fund manager at Tokyo-based Astmax Co Ltd. "Fundamentally, there is no change. People are going to wait and see what the Fed's view is on the economic situation."
Rising prices are a major risk for the global economic recovery as they put upward pressure on inflation, the International Energy Agency's chief economist, Fatih Birol, said on Tuesday.
"High oil prices are a significant risk to derailing the economic recovery not only in the OECD countries, but also in China and India," Birol told Reuters.
"China and India are two most important economies which helped us get out of the economic crisis. If they go for tightening of monetary policies, this may lead to a slowdown in their economies which is bad news for all of us."
Oil fell on Monday, pressured by uncertainty over the approval of austerity measures for Greece, apart from the sell-off of a key spread between the two benchmarks.
Brent settled down $1.52 at $111.69 barrel, while U.S. crude oil futures settled up 25 cents at $93.26 a barrel after testing the 200-day moving average.
U.S. oil is expected to stay between $90 and $100 a barrel at least until there is more clarity on growth in the United States and gasoline consumption, Emori at Astmax said.
Industry group, the American Petroleum Institute, will release its weekly report on stocks later in the day. U.S. crude oil inventories fell last week amid lower imports and a rise in refinery utilization rates, a preliminary Reuters poll ahead of the report showed. Crude stocks were forecast down 500,000 barrels, on average, in the week to June 17. (Editing by Ed Lane, Himani Sarkar)