* At least three firms shut in Libyan output
* Gas pipeline and oil export terminals disrupted
* Concern other big producers could suffer supply outages
* For a 24-hour technical outlook on oil: http://graphics.thomsonreuters.com/WT/20112302083814.jpg
* Coming Up: January U.S. existing home sales data
(Updates prices, analyst comments, IEA comments)
By Francis Kan
SINGAPORE, Feb 23 (Reuters) - U.S. crude futures climbed to
a 2-1/2-year peak on Wednesday on concern that unrest in Libya
could spread to other top oil producers in the region and cut
more output.
Violent clashes in Libya have resulted in at least three oil
companies halting output in Africa's third-largest producer,
which pumps 1.6 million barrels per day (bpd), or nearly 2
percent of global supply.
The disruptions mark the first reduction in oil supply
stemming from a wave of protests that have swept through the
oil-producing Middle East and North Africa. Investors fear for
the potential impact on the flow of oil from top exporter Saudi
Arabia if it suffers similar unrest.
U.S. crude rose as high as $96.08 a barrel, the
highest level since October 2008. By 0709 GMT, the April
contract had trimmed gains to trade at $95.72, up 30 cents on
the day.
Brent crude rose 84 cents to $106.62 a barrel. On
Monday, Brent hit a 2-1/2-year high of $108.70.
"Even if Libya completely shuts down, there isn't a supply
issue. But the (U.S. crude) could go to $100, given the
potential for this contagion to spread to Saudi Arabia," said
Jonathan Barratt, managing director of Commodity Broking
Services in Sydney.
To date, protests in Saudi have been low key. But majority
Shi'ites in neighbouring Bahrain are protesting against the
Sunni-led government and there is concern this could spill over
to the Shi'ite minority living in Saudi Arabia's oil-producing
eastern province.
"The importance of Bahrain is perhaps being underplayed
currently. While not a major oil producer, Bahrain's impact on
the oil market reverberates through its importance in Saudi
Arabia," said Barclays Capital analysts Helima Croft and Amrita
Sen in a research note.
Natural gas supplies have also felt the impact of Libya's
unrest, as a pipeline carrying Libyan gas to Italy has been
closed. Libyan leader Muammar Gaddafi has refused to step aside
despite the growing revolt and threatened tougher action against
protesters in a defiant speech on Tuesday.
International Energy Agency (IEA) executive director Nobuo
Tanaka said that sustained oil prices over $100 per barrel for
the rest of the year could tip the global economy back into a
repeat of the 2008 economic crisis.
"We are very much concerned about the situation, it's a risk
to the stable supply of oil," Tanaka told Reuters at the
International Energy Forum in Riyadh on Tuesday.
Brent crude has risen around 12.5 percent so far this year.
U.S. crude is up just under 5 percent on the year, but is over
$50 below its 2008 high of $147.27.
"Given the speed at which events are unfolding, we do not
rule out a further spike of $20/bbl or beyond in the coming
weeks if the unrest disrupts output," ANZ commodities analysts
Serene Lim and Mark Pervan wrote in report on Wednesday.
Brent oil could revisit its Monday's high of $108.70 a
barrel, while U.S. crude could head to $97.33 a barrel within 24
hours, according to Reuters market analyst Wang Tao.
NO MORE CRUDE FROM SAUDI
Top exporter Saudi Arabia on Tuesday stopped short of
pumping more oil to calm markets, telling visiting consumer
nations prices were driven by fear.
The kingdom could ramp up its oil production enough within
one month to replace all of Libya's crude exports if growing
strife in the African nation cuts off its oil shipments, a
senior U.S. government energy official said on Tuesday.
Saudi Arabia supplies around 10 percent of the world's oil,
but also holds most of the world's spare capacity. It is the
only producer able to respond quickly with large volumes of oil
to compensate for a serious supply outage.
IEA member states would consider releasing oil from their
emergency stocks if supplies were disrupted as a result of
continuing turmoil in the Middle East, the agency's chief
economist Fatih Birol said on Tuesday.
The IEA is adviser to 28 industrialised nations on energy
policy.
A rise in Japanese crude oil stocks and an expected increase
in U.S. inventories could also ease supply concerns, analysts
said.
(Editing by Simon Webb)
