Brent stable at US$118 as eurozone concerns ease

Brent crude futures held steady above US$118 on Wednesday as concerns on the euro zone crisis eased after a successful Spanish debt auction and a better growth forecast from the International Monetary Fund. The IMF offered a cautiously optimistic view on global growth, which it said is slowly improving as the US recovery gains traction and dangers from Europe recede. While the euro zone will suffer a mild recession, the IMF said it would be less severe than feared after moves to calm markets at the turn of year. Brent June crude had slipped six cents to US$118.72 a barrel by 0315 GMT, after settling higher at US$118.78 in the previous session. US May crude gained 15 cents to US$104.35, after settling at its highest close since April 2. The May contract expires on Friday. "Traders' risk appetite improved after the successful debt auction, IMF increasing global growth forecast and good data from Germany," said Natalie Robertson, an analyst at ANZ. "Going forward, the crude market will trade sideways with a potential increase in demand in July once the refineries are back from maintenance." Spanish bond yields, which have surged in recent days on concerns about the country's economy, eased back as Tuesday's better-than-expected bill sale brightened the mood. Also boosting sentiment, a survey in Germany, Europe's biggest economy, showed an unexpected rise in analyst and investor confidence in April. Brent's premium to US crude narrowed to below US$14 a barrel as investors continued to price in Monday's news that the Seaway pipeline's crude oil flow will be turned around towards the Gulf Coast as early as mid-May. This will likely help to alleviate a supply glut in the United States, with crude oil stocks rising more than expected to 3.4m barrels, a weekly report from industry group the American Petroleum Institute showed.