Crude prices rise, Iran nuclear talks go to 2nd day

(Reuters) - Crude rose on Thursday after Washington signaled it was hopeful of progress in resolving a dispute over Iran's nuclear goals as talks on the issue enter a second day, easing fears of oil supply disruptions.

But economic concerns about the euro zone lingered, with European leaders preparing contingency plans in case Greece decides to quit the euro.

FUNDAMENTALS

U.S. crude rose 65 cents to $90.55 at 9.21 p.m. EDT.

ICE Brent crude climbed 92 cents to $106.48 a barrel.

Iran and six major powers exchanged proposals at talks in Baghdad on Wednesday, attempting to defuse a dispute over Tehran's nuclear energy program.

Wednesday's meeting came a day after International Atomic Energy Agency (IAEA) Director General Yukiya Amano said he expected to sign a deal with Iran soon to boost cooperation with the investigation into the Islamic Republic's nuclear activity, although differences remained.

European Union leaders, advised by senior officials to prepare contingency plans in case Greece decides to quit the single currency, urged the country to stay the course on austerity and complete the reforms demanded under its bailout program.

German Chancellor Angela Merkel reiterated on Thursday that she wanted Greece to stay in the euro zone, but that it must fulfill the commitments it had made in return for its financial aid.

The Energy Information Administration's weekly report showing rising U.S. crude inventories and lackluster fuel demand. U.S. crude stocks rose 883,000 barrels last week, only slightly less than expected, the EIA said.

The World Bank cut its economic growth forecast for China this year to 8.2 percent and urged the country to rely on easier fiscal policy that boosts consumption rather than state investment to lift activity.

The U.S. spring home-selling season got off to a strong start in April, with rising sales and prices providing evidence that a housing market recovery was gaining some traction.

MARKETS NEWS

The embattled euro hovered just above a near two-year low against the dollar on Thursday and remained vulnerable to further declines as the prospect of a Greek exit from the euro zone kept investors on tenterhooks.

Asian shares were steady but remained vulnerable on Thursday.