Oil steadied at above $77 a barrel on Tuesday, after a rebound of 1.6 percent in the previous session, as Dubai debt default fears eased and investors cast about for fresh clues to the pace of global economic recovery.

With a series of key economic indicators due out in the United States later in the day, as well as a preliminary snapshot of the weekly U.S. fuel inventory report, traders are expected to stay on the sidelines until they get a clearer picture on the state of energy demand.

U.S. crude for January delivery crept up 1 cent to $77.29 a barrel by 0722 GMT (2:22 a.m. EST). London Brent crude inched up 2 cents to $78.49.

Crude oil prices, which rose for four straight months and squeezed out a gain of 0.5 percent in November, have oscillated in a narrow band of $70 to $82 over the past two months against a backdrop of mixed economic data.

We see little impetus for a break to the upside, even if economic indicators surprise to the upside this week, Credit Suisse analysts said in a research note to clients.

The inventory overhang in the diesel and heating oil markets should prevent prices from breaking higher for the time being.

In a sign of tepid demand, Saudi Aramco has sold 80,000 tonnes of early December fuel oil at a three-year low discount of under $15 a tonne to Singapore spot quotes, traders said on Tuesday.

Key data due for release later on Tuesday include U.S. weekly retail sales, factory activity for November, pending home sales and construction spending for October.

Investors will watch for the weekly report of the American Petroleum Institute to see if fuel demand in the world's largest energy consumer shows signs of sustained recovery, and dollar movements will also set direction, analysts said.

U.S. crude oil stockpiles likely were little changed last week as higher imports offset gains in refinery utilization, a Reuters poll of analysts showed.

Distillate stocks were seen down 400,000 barrels, while gasoline stocks were expected to rise by 900,000 barrels, the poll showed.

The dollar recovered early losses on Tuesday as the yen came under pressure ahead of a special central bank meeting, while Asian shares were steady as investors paused after Monday's bounce.

(Editing by Michael Urquhart)

Dubai Credit Suisse