Defending champion Peter Lawrie produced a thoroughly professional performance to remain on track for back-to-back Spanish Open victories.
Last year he was five behind Ignacio Garrido and won in a play-off.
The Irish ace opened with 11 consecutive pars and shrugged off missed birdies chances from around six feet at the 12th and 13th by holing a 30 footer for birdie at the par-three 14th.
He then three-putted from the fringe for a disappointing par-five at the 15th but birdied the 16th before finishing with a bogey at the last.
Happy with his position, Lawrie said: "It was a bit of a struggle. The pin placings were very tough and my putter let me down a few times, but 71 is not bad.
"I am in a good position and it would be wonderful to win again. Any tournament anywhere is more than rewarding."
Paul McGinley's hopes of challenging for the title evaporated on the back nine as he signed for a 73 that left him eight strokes off the pace on six-under par.
The former Ryder Cup star picked up early birdies at the third and fourth, but struggled off the tee and failed to hole anything significant on the greens as he bogeyed the 10th, 14th and 18th.
Levet carded a one-under 71 and leads by two shots from 35-year-old European Tour rookie Stuart Davis, who had four birdies in the last seven holes for a superb 67.
Gary Murphy is 69th on five-over after a 77.