The French Citroen driver, who had been 27.5sec behind Petter Solberg after Friday's opening day, not only passed the Norwegian, but reach the halfway point with a healthy 17.8sec advantage.
Running third through Saturday's loose gravel stages, Loeb benefited from a cleaner racing line than Solberg, who is in a private Citroen, as well as compatriot Sebastien Ogier.
"I have the lead now and I'll try to increase it but it's not easy," said Loeb.
"It was a good drive, with just a few little mistakes. I was on the limit at times. I will try to continue to increase the lead on the second passes but maybe I won't be able to make as much of a difference. I'll try."
Solberg suffered by driving first on a track which needed 'cleaning'.
"The first stage was very good actually, and on the second we didn't lose as much time as we'd expected to, but the third was very loose," said Solberg.
"It was difficult to push because it was so slippery. First on the road isn't easy but I know what I am doing."