* EIA report shows Cushing stocks up over 1.1 mln barrels
* Libya's NOC chairman says oil could rise above $130
* Libyan oil output falls further amid clashes in east
(Updates lead, quotes, prices, restacks)
By Jessica Donati
LONDON, March 2 (Reuters) - U.S. crude oil pared gains on
Wednesday, falling briefly below $99 a barrel after government
data showing stocks at the key delivery hub of Cushing hit a
record high.
U.S. crude oil stocks at Cushing rose by more than 1.1
million barrels in the week to Feb. 25, data from the Energy
Information Administration showed. []
"The headline number was a draw in crude, but a huge build
at Cushing was recorded. Prices are still very volatile at the
moment and that's probably why we've had a bit of a slap," said
Rob Montefusco, an oil trader at Sucden Financial.
U.S. April crude futures <CLc1> were up 52 cents at $101.15
a barrel at 1556 GMT after the EIA report was released, down
from peaks of $101.47 earlier in the session.
Brent crude for April <LCOc1> was 35 cents higher at
$115.77 a barrel around the same time, after turning negative
after the EIA stock report was released.
Earlier on, oil prices had climbed back towards
two-and-a-half year highs as Libyan leader Muammar Gaddafi vowed
to resist rebellion to the end, while his top oil official
warned of higher oil prices.
"We will fight until the last man and last woman to defend
Libya," Gaddafi told supporters [].
Shokri Ghanem, chairman of Libya's National Oil Corporation,
told Reuters Libya's troubles had created its worst energy
crisis in decades and supply cuts to world markets could push
oil above $130 a barrel in the next month if troubles persist.
[]
Ghanem said crude oil output had dropped to 700,000-750,000
barrels per day, from a pre-crisis 1.6 million bpd, after the
flight of most of the foreign workers who make up about 10
percent of the Libyan energy industry's labour forces.
"The question is what will be the outcome over the next few
days -- will there be a full stoppage as the evacuation of
personnel from Libya continues?" said Harry Tchilinguirian, head
of commodity market strategy at BNP Paribas. Markets had become
more volatile and moves of a dollar in either direction had lost
significance, he added.
Some oil exports from Libya continued.
Two Greek tankers left the Libyan port of Es Sider on
Tuesday, but concerns about potential violations of recently
imposed U.S. sanctions against Libya left a cargo sitting off
the coast of Texas and Louisiana in the United States.
[] []
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To watch the Ghanem interview, click:
http://link.reuters.com/jys38r
Middle East unrest graphics http://r.reuters.com/nym77r
Who is in control in Libya http://r.reuters.com/jem28r
Map of control in Libya http://r.reuters.com/fug38r
Countries most reliant on oil http://r.reuters.com/dux28r
Calculator: Oil price impact on GDP
http://r.reuters.com/jux28r
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RISK OF CONTAGION
Governments in Yemen, Oman, Iran and Iraq have had clashes
with protesters over the past fortnight as popular unrest has
spread in the region holding more than 60 percent of the world's
reserves.
"Oil prices are subject to the ebb and flow of news out of
the Middle East ... there's a good chance of Brent rising to
$120 over the next couple of days," said Michael Hewson, a
market analyst at CMC markets.
Last week Brent crude futures rallied to 2-1/2-year peak
within sight of $120 on disrupted supply from Libya, but fell
back as a boost in Saudi Arabian output was expected to fill in
for the loss of Libyan oil.
"Given the geopolitical tensions we are seeing in the Middle
East, conventional bets on supply and demand... are off. The
market's focus is on the bigger picture," said Tchilinguirian.
(Additional reporting by Florence Tan, editing by Keiron
Henderson)
