SINGAPORE – Oil was relatively flat in Asian trade Tuesday after overnight gains on upbeat US business data that boosted economic recovery hopes, as fears over Dubai's debt problems receded, analysts said.

New York's main contract, light sweet crude for January delivery, eased two cents to $77.26 a barrel after jumping $1.23 from Friday's close overnight.

Brent North Sea crude for January delivery was three cents higher at $78.50.

An unexpected rise in business activity in the US Midwest region and increase in the Chicago purchasing managers index (PMI) were the main factors behind the overnight surge in crude prices, analysts said.

The Chicago PMI rose for the second consecutive month, to 56.1 in November from 54.2. Most analysts had expected a slight decline to 53.3 in the Institute for Supply Management (ISM) regional index.

The stronger-than-anticipated survey "suggests that the recovery in manufacturing is spreading beyond autos," said Ryan Sweet of Moody's Economy.com.

Looking ahead, analysts from the Commonwealth Bank of Australia said any sharp surge in crude prices was unlikely as investors had already priced in the impact of global economic recovery over the next year.

"We expect that oil prices will remain relatively flat in the near term rising only modestly over the course of 2010," the bank's analysts said in a report.

"The oil price already appears to factor in international economic recovery."