* 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, updates prices, market activity to settlement.)
By Joshua Schneyer
NEW YORK, Feb 23 (Reuters) - U.S. crude jumped to a
28-month high above $100 a barrel on Wednesday, as investors
weighed the risk of Middle East unrest spreading from Libya to
bigger exporters including Saudi Arabia.
U.S. crude for April delivery <CLc1> rose 2.8 percent to
settle at $98.10 after soaring as high as $100 earlier.
Brent <LCOJ1>, which has posted the biggest three-day gain
since October 2009, rose 5.3 percent to settle at $111.25. It
was Brent's highest settlement since August, 2008, shortly
before the collapse of U.S. investment bank Lehman Brothers.
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The rise of US crude prices:
http://link.reuters.com/byv28r
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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. []
Oil's surge above $100 helped fed worries about the impact
of costly energy prices on the U.S. economy, dragging U.S.
equities markets lower. In 2008, crude's advance to a record
$147 a barrel cut demand and contributed to the deepest global
economic downturn since World War Two. []
U.S. oil prices seesawed in a range as wide as $5 a barrel
as traders mulled whether popular revolts sweeping across North
Africa could spread to big crude exporters like Saudi Arabia.
"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. []
"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," said Edward Meir, an analyst at
MF Global in New York.
Many analysts also expected Libya's violence to take a
heavy toll on the North African country's oil output,
potentially crimping exports for months or years.
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BRENT SPREAD WIDENS
Brent traded at a $13.23 a barrel advantage to U.S. WTI
post-settlement, widening from a $10.85 gap on Tuesday, as
traders bet Middle East unrest would crimp European oil supply.
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. (Graphic http://link.reuters.com/cyv28r )
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 and David Gregorio)
