Brent stable at $118 as euro zone concerns ease

LONDON (Reuters): Brent crude futures held above $118 on Wednesday as optimism in Germany and a successful Spanish debt auction alleviated fears about the euro zone, but the prospect of further talks between Iran and the West continued to ease pressure on the market.

Worries about the euro zone debt crisis flaring up again were eased after a Spanish bill auction was met with strong demand on Tuesday.

But data on Wednesday showing bad loans at Spanish banks at their highest level since October 1994 underscored the challenges still facing the region’s fourth-largest economy.

Brent June crude was down 37 cents at $118.41 a barrel at 0847 GMT, after settling little changed in the previous session. Brent tumbled 2 percent at the start of the week.

U.S. May crude gained 15 cents to $104.35, after settling at its highest close since April 2. The May contract expires on Friday.

Brent’s premium to U.S. crude <CL-LCO1=R> fell below $14 a barrel as investors continued to price in news about a pipeline reversal in the U.S. and the prospect of further talks between six world powers and Iran.

Another meeting is expected to take place next month, after negotiators said talks at the weekend had been constructive.