* Europe pledges new plan to recapitalise banks, resolve Greece debt
* Positive U.S. jobs data ease double-dip recession fears
* Market eyes China data this week for economic pulse (Adds ANZ comment, updates prices)
By Florence Tan
SINGAPORE, Oct 10 (Reuters) - Brent rose above $106 on Monday, fuelled by optimism that demand in the world's largest consumer would hold after U.S. data allayed fears of a renewed recession while the euro zone edged closer to a resolution of its debt crisis.
Market sentiment improved after leaders in France and Germany promised on Sunday a new plan to recapitalise euro zone banks by the end of the month. Friday's data showing job gains in the United States also eased recession fears.
Brent crude for November
U.S. November crude
"There is a positive feel to problems being solved at the moment," said Jonathan Barratt, managing director at Commodity Broking Services in Sydney.
"We now have a timeline in Europe which people will work towards."
German Chancellor Angela Merkel and French President Nicolas Sarkozy said on Sunday that their goal was to come up with a sustainable answer for Greece's woes, agree how to recapitalise European banks and present a plan for accelerating economic coordination in the euro zone by a G20 summit in Cannes on Nov. 3-4.
The board of Franco-Belgian Dexia bank accepted on Monday a rescue plan drawn up by the governments of France, Belgium and Luxembourg after it became the first bank to fall victim to the two-year-old euro zone debt crisis.
"Price sentiment should improve this week as European lawmakers continue to ease concerns, although oil's high sensitivity to equity markets creates additional uncertainty," ANZ analysts said in a note.
SUPPORTIVE DATA
In the United States, more workers were hired in September while job gains for the prior two months were revised higher, easing fears of a double-dip recession at the world's largest oil consumer.
"The U.S. economic data suggest that we're not going into recession," Barratt said.
He added that recent drawdowns in U.S. oil inventories suggested more demand while forecasts of a cold winter could support U.S. oil prices at $85 and $86 a barrel.
Saudi Arabia sees neither a decline in global oil demand nor a reduction in the kingdom's exports due to increased output from Libya, Oil Minister Ali al-Naimi said on Sunday.
A day before, Naimi said the kingdom remained ready to meet all its customers' needs. In September, its output fell to 9.39 million barrels per day (bpd) from around 9.8 million bpd in August, he said.
Unrest in the Middle East brewed on as oppositions tussled with the governments in Syria and Yemen.
Investors will be watching for trade and inflation data from China later this week to gauge the economic health of the world's second largest oil consumer, Barratt said.
Yet the euphoria may not last as speculators have opened new short positions to bet on further price falls, data from the U.S. Commodity Futures Trading Commission showed on Friday.
Daily technical charts showed that Brent's upside was limited to $107.85/bbl while U.S. oil faced a strong resistance at $84.10 a barrel, Reuters markets analyst Wang Tao said.
(Reporting by Florence Tan; Editing by Miral Fahmy)