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Brent hovers near $115 on euro zone hopes

SINGAPORE - 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 slipped 1 cent to 114.63 per barrel at 0340 GMT. It rose to as much as $115.58 on Tuesday, the highest since it touched a three-month peak of $117.03 last week. US crude fell 9 cents to $96.75 per barrel.

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.

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 UN 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.