* About 25 percent of Libyan oil output shut
* Worries persist over Mideast, North Africa outages
* Traders weigh whether OPEC will move to produce more oil
* Oil's abrupt surge raises concern over economic impact
(Recasts, updates prices, market activity, adds detail)
By Joshua Schneyer
NEW YORK, Feb 23 (Reuters) - U.S. crude jumped to a
28-month high of $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 per barrel after soaring as high as $100.
Brent <LCOJ1>, which has posted the biggest three-day gain
since October 2009, rose 5.3 percent to settle at $111.25, its
highest close since before the collapse of U.S. investment bank
Lehman Brothers in 2008.
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The rise of US crude prices:
http://link.reuters.com/byv28r
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The standoff between an increasingly isolated Libyan
strongman Muammar Gaddafi and rebel factions now in control of
oil-rich eastern Libya has cut output in the world's No. 12
crude exporter by at least 25 percent, or 400,000 barrels a
day, according to Reuters calculations. []
The death toll from Gaddafi's attempts to crush a revolt
against his four-decade rule may already be as high as 1,000
people, Italy's Foreign Minister said.
[]
Austria's OMV was the latest oil company to confirm it was
cutting production in Libya, although some crude shipments were
still leaving the country, with at least three oil tankers
dispatched since Tuesday. []
The unrest has traders wondering when OPEC and its kingpin
producer Saudi Arabia could boost oil output and stem the price
surge. Saudi officials have said the kingdom, which holds the
bulk of OPEC's spare production capacity, would act to make up
for any major disruption.
"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.
FEAR OF 2008 REDUX
Oil's surge fed worries about the impact of energy prices
on the U.S. economy, dragging 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 rallied through a long-term uptrend
resistance, on course for the biggest weekly gain since the
financial crisis. (Graphic: http://link.reuters.com/cyv28r )
Prices seesawed in a range as wide as $5 a barrel through
the day, 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."
Protests may grow in Bahrain or spill over into neighboring
Saudi Arabia. While the Saudi royal family has faced no
opposition in the streets, hundreds of people on Wednesday
backed a Facebook page campaigning for a "day of rage" across
the country next month.
"Saudi Arabia is nervous about potential opposition too and
the market senses that," said Gene McGillian of Tradition
Energy in Connecticut.
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.
[]
BRENT SPREAD WIDENS
Brent traded at a $13.43 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.
Weekly U.S. oil inventory data from industry group API,
released late Wednesday, showed U.S. petroleum stocks rose
163,000 barrels last week, after analysts polled by Reuters had
forecast a bigger, 1.3 million barrel rise. [] []
Distillate inventories fell a less-than-expected 1.4
million barrels and gasoline supplies fell by 1.6 million
barrels, API data showed, bucking analyst expectations for a
rise.
More authoritative weekly inventory figures are due on
Thursday from the government's U.S. Energy Information
Administration.
(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)
