* About 25 percent of Libyan oil output shut
* Worries persist over Mideast, North Africa outages
* Coming up: API crude inventory data at 2130 GMT
(Recasts, adds byline, comment, details)
By Joshua Schneyer
NEW YORK, Feb 23 (Reuters) - U.S. crude surged to a
28-month high of $100 a barrel on Wednesday as escalating
violence in OPEC producer Libya slashed output there and
investors bet the unrest could spread to other oil exporters.
Brent has posted the biggest three-day gain since October
2009, rising to as much as $111.85 a barrel. That marked its
highest since October 2008, shortly after the collapse of U.S.
investment bank Lehman Brothers. []
U.S. crude has shot up more than 15 percent since Friday.
West Texas Intermediate futures <CLc1> rose 3.7 percent to
$99 a barrel as of 1:37 p.m. EST (1837 GMT) in New York, paring
some earlier gains. Brent <LCOJ1> gave up some of its earlier
advance to trade up 5.1 percent at $111.18.
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The rise of US crude prices:
http://graphics.thomsonreuters.com/gfx/MR_20112302122958.jpg
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A lethal political standoff between Libyan strongman
Muammar Gaddafi and rebel factions now in control of oil-rich
eastern Libya has already cut output in the world's No. 12
crude exporter by more than 25 percent, or 400,000 barrels a
day, according to Reuters calculations. []
The price surge raised concern about the impact of costly
fuel on a fragile U.S. economic recovery and dragged U.S.
equities lower. A jump in oil to a record $147 a barrel during
2008 led to demand destruction and contributed to the deepest
global economic downturn since World War Two. []
Traders are weighing the risk that popular revolts, which
have been sweeping across North Africa since January, could
spread to exporters in the Middle Eastern Gulf.
"Oil prices are not likely to fall any time soon," said
Shelley Goldberg, commodities and energy strategist at Roubini
Global Economics in New York.
"It's not all about Libya, but a fear these movements will
spread further across the Middle East and North Africa region.
We're no longer in the early stages of uprisings, but we're
probably somewhere in the middle stages, with more ahead."
The possibility that protests could expand in Bahrain or
potentially into neighboring Saudi Arabia, OPEC's top oil
exporter, helped push prices higher.
While the kingdom has faced no tumult to date, hundreds of
people on Wednesday backed a Facebook page campaigning for a
"day of rage" across Saudi Arabia next month. []
"Saudi Arabia is nervous about potential opposition too and
the market senses that," said Gene McGillian of Tradition
Energy in Connecticut.
SAUDI ARABIA'S NEXT MOVE
Traders were also watching for signals that Saudi Arabia,
which controls much of global spare production capacity, would
pump more oil to compensate for Libya's lost output. Its oil
minister has said the kingdom and other OPEC members would be
ready to act should any 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, an analyst at MF Global in New
York.
"That is why it is imperative the Saudis release some extra
barrels into the market now to calm the situation, rather than
simply trying to talk the price down."
Many analysts expect Libya's violence to take a heavy toll
on the North African country's oil output, potentially crimping
exports for months or years. []
BRENT SPREAD WIDENS
Brent traded at a $12.58 a barrel advantage to U.S. WTI,
widening from a $10.85 gap on Tuesday, as traders bet conflict
in the Middle East could hit European oil supply hardest.
Libyan exports usually feed a quarter of Italy's oil demand.
However, the spread has narrowed sharply from a record
$16.51 hit on Feb. 17.
U.S. crude rallied through a long-term uptrend resistance,
on course for the biggest weekly gain since the financial
crisis. For a graphic, click on:
http://graphics.thomsonreuters.com/gfx/MR_20112302133538.jpg
Traders geared up for U.S. weekly inventory data, the first
of which will be released by the industry group American
Petroleum Institute later on Wednesday at 4:30 p.m. EST (2130
GMT).
A Reuters poll forecast that U.S. crude stockpiles rose 1.3
million barrels last week, while distillate inventories fell
1.4 million barrels and gasoline supplies rose 400,000 barrels.
[]
(Additional reporting by David Sheppard and Gene Ramos in New
York; Zaida Espana in London, Francis Kan in Singapore; Editing
by Walter Bagley)
