UPDATE 6-Brent oil falls after U.S. blizzard; Europe worries drag

* RBOB contract leads losses after snowstorm

* Iran nuclear fuel move may avert mid-year crisis

(Updates with settlement prices) NEW YORK, Feb 11 (Reuters) - Brent crude oil futures fell on Monday, with gasoline futures leading losses after last week's blizzard in the U.S. Northeast, one of the world's biggest gasoline markets, is expected to have had little impact on regional fuel supplies. Investors' concerns about the health of the euro zone economy also outweighed confidence stemming from stronger-than-expected demand growth in China revealed last week. "(U.S. refined) products are lower because they went up last week on fears the blizzard would harm refineries or infrastructure, but the storm just caused demand destruction," said Phil Flynn, analyst at Price Futures Group in Chicago. Brent lost 77 cents to settle at $118.13 a barrel, after slipping to $117.54 in early trade. U.S. crude rose $1.31 to $97.03 a barrel, and RBOB gasoline lost more than 3 cents to $3.0212 a gallon. Brent's premium over U.S. crude contracted from $23.18 at Friday's settlement to $21.10. After the blizzard dropped up to 40 inches (1 meter) of snow with hurricane-force winds on the U.S. Northeast, hundreds of thousands of people were left without power and many stayed off the roads. Much of Monday's market action was due to traders unwinding spread trades put in place last week or earlier in the month, said Richard Ilczyszyn, chief market strategist at iitrader.com LLC in Chicago. Oil markets are expected to see limited trade this week as many Asian markets are shut because of the Lunar New Year. Brent hit a nine-month high on Friday, capping a fourth consecutive week of gains, after data showed Chinese trade surged in January. While Chinese growth is supporting oil prices, developments in the euro zone threaten to weigh further on equities and the euro. A corruption scandal is threatening political instability in Spain and the outcome of Italy's upcoming election is becoming less certain. This week, Germany, France and Italy will release the latest quarterly figures on gross domestic product, which are expected to point to a contraction in the three major European economies. Analysts said oil prices could weigh on a euro zone recovery after the recent rally in Brent, which was supported by positive economic sentiment. Supply worries in the Middle East eased slightly with news that Washington and Tehran may have more time to negotiate over Iran's disputed nuclear programme after reports that Iran appears to have resumed converting small amounts of its higher-grade enriched uranium into reactor fuel.

(Additional reporting by Robert Gibbons in New York, Ron Bousso and Alex Lawler in London, and Rebekah Kebede in Perth; Editing