European stocks pared gains to trade flat on Wednesday afternoon, as rising oil prices ahead of key data revived inflation fears, while banking stocks fell on fresh credit jitters. Oil prices rose to near $116 a barrel ahead of U.S. weekly inventory data, which was expected to show a drop in gasoline inventories. Banking stocks were the biggest negative weight on the index, with Barclays down 5.3 percent and UniCredit down 2.1 percent. Adding to worries over the health of the banking sector, the New York Post said in a report citing sources familiar with the matter that Lehman Brothers Chief Executive Dick Fuld nearly struck a deal to raise almost $5 billion from South Korean wealth funds and institutions, but the pact disintegrated