* Oil prices eye fresh 2-1/2 year highs
* Upbeat U.S. data helps Asian stocks drift up
* Euro seen underpinned ahead of ECB meeting
(Updates prices)
By Ian Chua
SYDNEY, March 3 (Reuters) - Crude oil prices held near 2-1/2
year peaks on Thursday as worries about supply disruption
persisted given ongoing unrest in Libya, but upbeat U.S.
economic news and a firmer Wall Street helped Asian stocks find
a steadier footing.
Both U.S. crude and Brent crude prices edged up as Libyan
rebels repulsed a land and air offensive by Muammar Gaddafi's
forces and the defiant leader warned foreign powers of "another
Vietnam" if they intervened.
Markets worry the growing instability in key Middle East oil
producing countries could signal another threat to global
supplies. Bank of America/Merrill Lynch analysts argue the oil
shock from Libya ranks as the eighth largest supply shock since
1950.
"The stability of the region has gone through a major shock
and the ripples are going to be felt for a while," said Carl
Larry, president of Oil Outlooks and Opinions based in Houston.
Gold, often sought in times of heightened geopolitical
tensions and as an inflation hedge, traded at around $1,433 an
ounce , within striking distance of a record high just
above $1,440.
Tokyo's Nikkei average rose 0.5 percent, following a
more than 2 percent fall on Wednesday, while stocks elsewhere in
Asia gained 0.6 percent.
"It's too early to be optimistic because concerns about
rising oil prices will likely persist," Masumi Yamamoto, a
market analyst at Daiwa Securities Capital Markets, cautioned.
"But investors might have oversold yesterday, so they may
buy back stocks with good fundamentals."
South Korea's KOSPI was among the best performers in
the region, advancing 1.6 percent, a day after plumbing a
three-month low.
Nomura analysts said they were turning more cautious on
Korea, worried the country's policy management could leave the
economy with a much higher inflation rate and more catch up to
do later. They also cited relative competition from Japanese
companies as the won appreciates and oil prices strengthened.
U.S. crude rose 0.2 percent to $102.47 a barrel, not
far from the recent peak at $103.41, while Brent crude
was also 0.2 percent higher at $116.63, closing in on the Feb.
24 high near $120.
Wall Street eked out small gains on Wednesday with the S&P
500 index ending 0.2 percent higher after the Federal
Reserve's Beige Book suggested economic activity picked up in
2011 and a private survey pointed to strong private-sector
hiring.
The private-sector jobs report bodes well for the
influential non-farm payrolls data due on Friday.
In the currency market, the euro was a touch softer after
rallying to near four-month highs against the dollar. But the
single currency is expected to stay supported ahead of the
European Central Bank policy meeting.
Markets are wary the ECB will sharpen its anti-inflation
rhetoric, reinforcing views the ECB will raise interest rates
before the U.S. Federal Reserve.
Still, some analysts warn the rally in the euro will
probably fizzle after the meeting.
"There has been a lot of hype in the market on the ECB for
some time, so I expect the euro to lose steam pretty much
regardless of what the ECB does today," said Teppei Ino,
currency analyst at the Bank of Tokyo-Mitsubishi UFJ.
The euro last traded at $1.3857 , having climbed as
high as $1.3890. The dollar index , which tracks its
performance against a basket of major currencies, was little
changed on the day at 76.690, hovering near the overnight low of
76.529, its lowest since early November 2010.
(Additional reporting by Luke Pachymuthu in Singapore and Ayai
Tomisawa and Hideyuki Sano in Tokyo; Editing by Andrew Marshall)
