Brent hovers near $115 on euro zone hopes, Mideast support

* Iran dispute, Syria tensions keep up supply concerns (Updates prices, adds trader's quote)

By Ramya Venugopal and Elizabeth Law

SINGAPORE, Aug 22 (Reuters) - Brent crude steadied near $115 a barrel on Wednesday, supported by hopes that European policymakers will act to resolve the region's debt crisis and by Middle East tensions that kept supply disruption concerns intact.

Brent oil has rebounded about a third from this year's low of $88.49 reached in June, hitting a three-month top last week on hopes of progress in Europe and worries about Iran.

To sustain that momentum, investors will need more concrete signals that central banks from Europe to China aim to take firm steps to stimulate their economies.

Brent October futures dropped 9 cents to 114.55 per barrel at 0644 GMT. It touched $115.58 on Tuesday, its highest since a three-month peak of $117.03 last week. U.S. crude shed 2 cents to $96.82 per barrel.

There "might just be a little bit of profit-taking, given that we're up at lofty levels and all we've got (from Europe) at the moment is dialogue, but they haven't got any action or any follow-through," said Ben Le Brun, a Sydney-based market analyst at OptionsXpress.

"Investors just gathering their breaths and looking out for the next piece of news that can potentially move prices much higher."

Stocks and currency markets have been rallying in recent weeks on speculation the ECB is set to take steps to cap borrowing costs in Spain and Italy, hopes that were fuelled by media reports out of Germany and U.K.

Greek Prime Minister Antonis Samaras is holding bilateral talks with leaders of France, Germany and the Eurogroup this week to seek concessions for its austerity-to-bailout swap. His meeting with Merkel is set for Friday.

"It's going to be fascinating after the ECB meeting to see what direction the markets take; we've priced in a lot of the good news already so I certainly don't think we'll see it rally (much), unless we get surprises on the upside," said Le Brun.

ESCALATING TENSIONS

Supply concerns continue to support prices, with escalating tensions in Iran as well as Syria adding to worries over an expected cut in output from the North Sea because of maintenance operations.

Turkey is investigating possible Syrian links to a deadly car bomb attack near its southeastern border, underscoring fears that the conflict in Syria is fuelling instability in neighbouring countries.

The International Atomic Energy Agency (IAEA), a U.N. nuclear watchdog, will try to persuade Iran to address questions about its suspected nuclear weapons research at a meeting on Friday, more than two months after previous talks ended in failure.

The talks will take place just a few days before the agency is due to issue its latest quarterly report on Iran's disputed nuclear programme.

"We could still see some support in Brent markets since there's ongoing tensions in the Middle East, said Natalie Rampono, a commodities strategist at ANZ in Melbourne.

"I do believe that the market has already priced-in the lower North Sea oil output for September, but net-net we could still see some gains given some of the risk in Middle East."

Also supporting prices was data from the American Petroleum Institute on Tuesday.

U.S. crude stocks fell by a larger than expected 6 million barrels in the week to Aug. 17 as imports dipped, compared with analysts' expectations for a 400,000-barrel drawdown.

Investors will also be looking to the minutes of the recent meeting of U.S. Federal Reserve policymakers for cues on the health of the U.S. economy.

"The price of U.S. crude is inching closer towards the psychological US$100 per barrel, however if the FOMC minutes serve to dissipate market enthusiasm we could see a halt to the climb higher by crude oil," said Tim Waterer, senior trader at CMC Markets. (Editing by Richard Pullin)