UPDATE 12-Oil pares losses as Saudi protest heightens worries

                                
 * 'Day of Rage' Saudi protests planned on Friday
                                
 * Higher dollar on euro zone worries spark early drop
                                
 * Gaddafi strikes in rebel heartland, fighting unabated
                                
 * Coming Up: U.S. retail sales, consumer mood data, Friday
 (Updates with Saudi Interior Ministry statement, paragraph 7)
                                
 By Gene Ramos
                                
 NEW YORK, March 10 (Reuters) - Oil recouped most of its
deep losses in late trade on Thursday after reports of police
firing on protesters in Saudi Arabia revived fears of further
unrest in the world's top exporter.
                                
 Prices had tumbled early in the day after after a Spanish
credit rating revived worries over euro zone credit, driving
the dollar higher.
                                
 That took precedence over further violence in Libya, which
traders fear is set for prolonged conflict that may do
long-lasting damage its oil infrastructure. [USD/]
                                
 Downbeat economic data from China and the United States
weighed on prices. But this was overshadowed by news of stun
grenades being used to disperse a crowd in Saudi Arabia's
oil-producing Eastern province just one day before activists
plan an unprecedented "Day of Rage" protest.
                                
 One witness told Reuters police lobbed percussion bombs to
disperse a crowd of about 200 people belonging to the kingdom's
Shi'ite minority. [ID:nLDE7292MV] [ID:nLDE7292NH]
                                
 "The news report that protesters were fired upon by police
in Saudi Arabia has pulled crude up from the lows," said Phil
Flynn, analyst at PFGBest Research in Chicago.
                                
 An Interior Ministry spokesman in Riyadh later said Saudi
police had fired over the heads of the protesters after the
demonstrators attacked policemen. [ID:nLDE729QH]
                                
 In London, ICE April Brent crude <LCOc1> settled down 51
cents at $115.43 a barrel, nearly $2 up from the day's low. On
the New York Mercantile Exchange, U.S. crude for April delivery
<CLc1> settled down $1.68 at $102.70.
                                
 Brent's premium against U.S. crude widened for a second day
to $12.73 at the close, from $11.56 on Wednesday. [CL-LCO=R]
The premium hit a record above $17 last week, but had
contracted sharply over the past week as traders took profits.
                                
 Traders will now watch closely for any disturbances on
Friday after unprecedented calls for mass protests billed as a
"Day of Rage" against Saudi Arabia's absolute monarchy.
                                
 Protests are also planned in other Gulf countries such as
Yemen, Kuwait and Bahrain on Friday, after the day's religious
prayers. inspired by upheavals in Tunisia and Egypt.
[ID:nLDE72901U]
                                
 LIBYA TIDE MAY TURN
                                
 In Libya, momentum appeared to turn against the rebels, who
had hoped to charge up the coast and into the capital Tripoli.
Instead state television said government forces had cleared the
oil port of Ras Lanuf of "armed gangs".
                                
 Saif al-Islam, leader Muammar Gaddafi's most prominent son,
said Libya is preparing full-scale military action to crush a
rebellion and will not surrender even if Western powers
intervene in the conflict. [ID:nSGE7290c9]
                                
 But rebel soldiers denied the eastern oil town had fallen
to pro-Gaddafi troops. A local oil company based in Benghazi,
where rebels have set up a National Libyan Council working to
oust Gaddafi, said it was making arrangements to market oil
directly to foreign buyers. [ID:nWEA7887]
                                
 With oil production running at less than two-thirds its
norm, exports essentially halted and reports of oil facilities
being hit in the violence, few traders were expecting a quick
recovery in output from the OPEC member.
                                
 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
  Graphics showing:
  Middle East unrest            http://r.reuters.com/nym77r
  Libya unrest                  http://link.reuters.com/dew48r
  Saudi Arabia's main oil region
                                
                             http://link.reuters.com/gew48r
  FACTBOX on Libya's oil sector              [ID:nLDE7292FC]
                                
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
                                
 CHINA DATA SPURS GROWTH WORRIES
                                
 Oil prices were also pressured by data showing China, the
world's second largest oil importer, unexpectedly posted the
largest trade deficit in seven years at $7.3 billion, stirring
global economic growth worries even though economists said the
sudden drop was likely temporary. [ID:nTOE72903F]
                                
 But China's crude oil imports rose to the third highest
level on record on a daily basis as refiners ramped up
operations despite a lull in demand lull during the holidays.
[ID:nTOE728071]
                                
 New U.S. jobless claims rose last week and the country's
trade deficit widened in January, weighing further on U.S.
crude. [ID:n10118103]
 (Additional reporting by Robert Gibbons in New York; Editing
by Marguerita Choy and David Gregorio)