* Investors still wary of euro zone debt plans
* U.S. crude stocks forecast down 200,000 barrels last week
* Coming up: U.S. API petroleum stocks; 2030 GMT (Updates prices)
By Francis Kan
SINGAPORE, Sept 27 (Reuters) - Brent crude rose above $105 on Tuesday, as concerns over Europe's debt crisis eased temporarily and a weaker U.S. dollar sparked buying of dollar-denominated assets.
Euro zone officials are working to boost the firepower of the region's rescue fund, European Central Bank policymakers said on Monday, while U.S. President Barack Obama piled on pressure for Europe to staunch a sovereign debt crisis that threatens the world economy.
However, analysts were wary about the rally as markets remain prone to swings in risk appetite, with investors waiting for details on the rescue plan.
"Clarity on the euro zone plan is still key, crude prices are swinging back and forth depending on what comments come out of Europe," said Victor Say, an analyst with Informa Global Markets in Singapore.
"Commodities have also been boosted by a weaker dollar and short covering after the recent sell-down."
Brent futures
Brent and U.S. crude prices have stabilised after falling to seven-week lows and posting weekly losses of more than 7 and 9 percent last week, respectively.
The U.S. dollar was down 0.6 percent against a basket of currencies on hopes for a resolution to the euro zone crisis, lifting commodities priced in the greenback.
Spot gold rallied 1 percent on Tuesday, snapping four consecutive sessions of losses, while spot silver gained 2.8 percent.
Turbulence in global markets since late July has been driven by investors' twin fears of renewed recession in the United States, and the chaos that Europe's sovereign debt crisis could inflict on the financial system if it continues unchecked.
"Much of the immediate action in oil is simply based on the same climate of economic fear that is battering all other asset classes, which then creates a cascading effect involving technical triggers, precipitous price falls and a disregard for the underlying fundamentals," said Barclays Capital analysts in a research note.
Markets remain volatile, with Brent
U.S. INVENTORIES, MIDDLE EAST
U.S. commercial crude stockpiles are expected to have fallen slightly last week, with product inventories expected to show builds, a preliminary Reuters poll of analysts showed on Monday.
Forecasts for a small decline follow the steep 7.34 million barrel drop in crude stockpiles reported by the EIA for the week to Sept. 16, which sent inventories to the lowest level since January.
Investors are still eyeing the political unrest and conflict in the oil-producing region of the Middle East and North Africa, even as Libya moves to restart its oil production.
Italy's Eni said it has restarted oil output from 15 wells, and a tanker is loading condensate at the Libyan port of Mellitah with another due to arrive on Tuesday to pick up a cargo that is most likely to be crude oil, the terminal's harbor master told Reuters.
In Syria, four soldiers were shot dead on Monday as they tried to escape a military camp and troops sealed off towns in a continuing crackdown on opponents of President Bashar al-Assad, activists said. (Editing by Clarence Fernandez)