* Libya airs tough stance, UN to vote on no-fly zone
* Japan in desperate bid to avert nuclear catastrophe
* Bahrain nabs some opposition leaders, clashes in Yemen
* Libyan army marching towards rebel-held Benghazi
* U.S. jobless claims, factory data help lift prices
* Coming Up: UN council to vote on Libya no-fly zone, 6
p.m. EDT
(Updates U.S. crude volume, adds graphic)
By Gene Ramos
NEW YORK, March 17 (Reuters) - Oil prices rallied nearly 4
percent on Thursday on fears of further escalation of
geopolitical tension in the Middle East and North Africa.
Oil prices recovered for a second day from three-week lows,
which had been sparked by prospects of lower oil demand from
earthquake-stricken Japan, and was part of an advance across
markets on worries about increasing geopolitical risks,
analysts said.
The oil-heavy Reuters-Jefferies CRB index <.CRB> of 19
commodities rose more than 3 percent, its biggest one-day gain
since August 2009.
"The focus is back on continuing unrest in the Middle East
and what will be a lot of disruption in Libya for a long time,"
said Christopher Bellew, an oil trader at Bache Commodities.
"The risk is more to the upside -- there was a lot of long
liquidation on that sharp sell off at the beginning of the
week," he added.
Brent crude for May delivery <LCOc1> settled at $114.90,
gaining $4.30 or 3.89 percent, after hitting a session high of
$115.39. It was the biggest one-day percentage gain since Feb.
23. Volume at the close was 313,317, the lowest since Feb. 21,
according to Reuters data.
Brent crude hit a 2-1/2-year high of $119.79 on Feb. 24,
on concerns about Libyan production outages as a rebellion
seeking his ouster gathered momentum.
U.S. crude for April delivery <CLJ1> settled up $3.44, or
3.51 percent, at $101.42 a barrel, after rallying to $101.99.
It was also the biggest one-day percentage gain.
By 4:37 p.m. EDT (2037 GMT), U.S. crude's volume was
531.296, its lowest level since Jan. 3. according to Reuters
data, with less than an hour left of the day's trading.
U.S. crude's sharp rise was also aided by upbeat data on
jobless benefit claims and factory activity in the Mid-Atlantic
region. Data showing that inflation remained contained despite
rising prices also helped boost investor mood. []
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Five-minute chart on crude futures:
http://r.reuters.com/qeb68r
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U.N. BODY TO VOTE ON LIBYA NO-FLY ZONE
The U.N. Security Council will vote on Thursday on a
resolution that Britain said would authorize all steps in Libya
short of a military occupation to protect Libyan civilians. The
vote was scheduled for 6 p.m. EDT (2200 GMT). []
"The news that the U.N. Security Council will vote on a
resolution to authorize a no-fly zone over Libya and imposing
more sanctions against it has helped crude rally here," said
Phil Flynn, analyst, at PFGBest Research in Chicago.
Ahead of the vote, Libyan state television quoted a
statement from Libya's Defense Ministry as saying "any foreign
attack on Libya will endanger air and maritime traffic in the
Mediterranean basin and expose both short and long term risks."
[]
"The headlines about Libya's response to any potential
foreign military act and the crackdown of protesters in Bahrain
are adding fuel to the fire and heightening tensions in the
Middle East," said Tom Knight, trader at Truman Arnold in
Texarkana, Texas.
"Prices have extended higher from yesterday, also aided by
by positive U.S. economic data today."
Bahrain arrested seven opposition leaders, a day after its
crackdown on protests among the Shi'ite Muslim majority drew
rare U.S. criticism and raised fears of a regional conflict.
[]
Libyan troops pushed forward towards the insurgent
stronghold of Benghazi and launched air raids on its outskirts
as Washington raised the possibility of air strikes to stop
Muammar Gaddafi's forces. []
In Yemen, security forces used live fire and tear gas on on
anti-government protesters, wounding at least 84, activities
said. []
Japanese engineers worked through the night to lay an
electricity cable to a damaged nuclear power plant in the hope
of restarting pumps desperately needed to pour cold water on
overheating fuel rods and avert a catastrophe. []
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Take a Look: Middle East, Africa unrest Japan disaster
[]
Take a Look: Japan disaster []
Picture, graphic packages: http://link.reuters.com/kuw58r
PDF on the impact on commodities and energy markets:
http://link.reuters.com/bum58r
LIVE: http://live.reuters.com/uk/Event/Japan_earthquake2
Reuters Insider show on Oil Price Tipping Points:
http://link.reuters.com/qet58r
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(Additional reporting by Robert Gibbons and Dave Sheppard in
New York; Claire Milhench in London; Alejandro Barbajosa in
Singapore; Editing by Marguerita Choy)
