* Oil gains as Libyan unrest helps push prices higher
* Euro advance on unexpected rise in U.S. home sales
* U.S. bonds rose as safe-haven allure returns
(Adds details, fresh prices)
By Herbert Lash
NEW YORK, Feb 23 (Reuters) - Crude oil prices surged and
investors sought safety in bonds, gold and the Swiss franc on
Wednesday as turmoil in Libya fanned fears of inflation and its
potential drag on the global recovery.
Brent crude futures in London rallied above $110 a barrel,
pushed by the biggest three-day percentage gain in a year, as
the first cut in oil supplies related to the recent wave of
anti-government unrest in North Africa fueled concerns. For
details see: []
The U.S. dollar slipped just shy of an all-time low to its
weakest level of the year against the Swiss franc and gold rose
above $1,400 an ounce in Europe as the revolt in Libya lifted
interest in safe-haven assets. [] []
The search for safety quashed any bearish impact on bonds
after data showed a surprise rise in existing homes sales in
January, leading U.S .Treasuries to slightly extend gains.
"Any of the events domestically are going to take a back
seat to the headlines coming out of the Middle East and
Northern Africa. The market is definitely more focused on what
is going on over there," said Marty Mitchell, head of
government bond trading at Stifel Nicolaus in Baltimore.
Muammar Gaddafi's attempts to crush a revolt against his
four-decade rule have killed as many as 1,000 people, Italy's
foreign minister said. []
Up to 25 percent of Libya's daily crude production of about
1.6 million barrels has been shut down, according to Reuters
calculations, helping to pressure oil prices.
U.S. light sweet crude oil <CLc1> rose $2.85 to $98.27 a
barrel, and Brent <LCOc1> rose $4.78 to $110.56.
Traders were focused on what top OPEC exporter Saudi Arabia
will do, even after its oil minister have said the kingdom and
other members of the Organization of Petroleum Exporting
Countries will act should a supply shortfall develop.
[]
"I don't think Libya alone will take us to $150 a barrel
but if unrest spreads in the Gulf countries we could easily get
there," said Edward Meir, analyst at MF Global in New York.
Copper, often a barometer of economic demand, fell to the
lowest levels in nearly a month on worries inflation could slow
down global economic recovery. The metal has slipped nearly 7
percent from record highs at $10,190 a tonne earlier in the
month []
Spot gold prices <XAU=> rose $15.72 to $1,413.20 an ounce.
U.S. Treasuries prices rose for a second straight session
as North African-related safe-haven buying trumped investor
efforts to force price concessions ahead of a five-year note
sale. []
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
3/32 in price to yield 3.45 percent.
"The turmoil is not only about inflation and oil, but it is
affecting equity markets and those safe-haven flows have been
dominating recently," said Glenn Marci, strategist at DZ Bank.
Equities markets slid on concerns about the impact of
rising oil prices and inflation on global recovery.
The MSCI world equity index <.MIWD00000PUS> was down 0.5
percent, while the pan-European FTSEurofirst 300 <> index
of top shares provisionally closed down 1 percent at 1,152.82.
The Dow Jones industrial average <> was down 64.22
points, or 0.53 percent, at 12,148.57. The Standard & Poor's
500 Index <.SPX> was down 7.30 points, or 0.55 percent, at
1,308.14. The Nasdaq Composite Index <> was down 31.47
points, or 1.14 percent, at 2,724.95.
The euro <EUR=> was up 0.81 percent at $1.3763. The dollar
was down against a basket of major currencies, with the U.S.
Dollar Index <.DXY> off 0.58 percent at 77.317.
(Additional reporting by Rodrigo Campos, Chris Reese and Julie
Haviv in New York; Jessica Mortimer, Zaida Espana, William
James, Joanne Frearson, Jan Harvey and Melanie Burton in
London; Writing by Herbert Lash)
(Editing by Andrew Hay)
