* Oil jumps as Libyan turmoil spurs fears of wider unrest
* Swiss franc nears record versus dollar on Libya concerns
* U.S. bonds rise as safe-haven allure returns
(Adds close of U.S. markets)
By Herbert Lash
NEW YORK, Feb 23 (Reuters) - U.S. oil prices surged to $100
a barrel for the first time since October 2008 on Wednesday,
driving investors to the safety of gold and the Swiss franc as
the revolt in Libya fanned fears of inflation and a stalled
recovery.
Brent crude futures in London jumped above $110 a barrel
after the first cut in oil supplies due to the political
violence in North Africa fueled concerns that if oil rises
enough, it could slow global economic growth. For details, see
[]
Gold rose to its highest in more than seven weeks and the
Swiss franc edged toward a record high as turmoil in Libya
drove investors to seek safety. The U.S. dollar fell broadly as
the greenback appeared to lose its safe-haven luster.
[] []
The dollar fell 0.6 percent to 0.9326 of a Swiss franc
<CHF=EBS>, near its all-time low of 0.9301.
Brent posted the biggest three-day gain since October 2009
as traders assessed whether the unrest that has swept North
Africa since January could spread to Saudi Arabia and the big
exporters in the 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,"
she said.
Higher volatility could lead West Texas Intermediate, the
U.S. oil benchmark, to touch highs of $110 or $115 a barrel
this year, Goldberg said.
In Libya, thousands celebrated the liberation of the
eastern city of Benghazi from the rule of Muammar Gaddafi,
while Italy's foreign minister said as many as 1,000 people
have been killed since the revolt began around a week ago.
[]
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 crude <CLc1> settled up $2.68 at $98.10 a
barrel, after earlier surging almost 5 percent to $100 on the
nose. Brent crude futures <LCOc1> closed up $4.47 at $111.25.
Despite the surge in prices to the psychological peak of
$100, the drag on the economy might not be that great.
"Although higher oil prices at these levels would
negatively impact the economy, material damage wouldn't likely
occur until we moved above the $120 level," Chris Jarvis,
president of Caprock Risk Management in Hampton Falls, New
Hampshire.
U.S. gold futures for April delivery <GCJ1> settled up
$13.20 at $1,414.30 an ounce, with volume about 30 percent
lower than the 30-day average.
U.S. Treasury debt briefly turned negative after an auction
of $35 billion in five-year notes drew a higher yield than
investors expected. []
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
8/32 in price to yield 3.49 percent.
U.S. stocks accelerated their slide after oil prices pushed
to $100 a barrel, but because a modest correction was expected,
some investors took the declines in stride. []
The Dow Jones industrial average <> closed down 107.01
points, or 0.88 percent, at 12,105.78. The Standard & Poor's
500 Index <.SPX> lost 8.04 points, or 0.61 percent, to
1,307.40. The Nasdaq Composite Index <> declined 33.43
points, or 1.21 percent, to 2,722.99.
The MSCI world equity index <.MIWD00000PUS> was down 0.6
percent.
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
global economic recovery. The metal has slipped nearly 7
percent from record highs at $10,190 a tonne earlier in the
month []
The euro <EUR=> was up 0.66 percent at $1.3743. The dollar
was down against a basket of major currencies, with the U.S.
Dollar Index <.DXY> off 0.46 percent at 77.768.
(Additional reporting by Chuck Mikolajczak, Wanfeng Zhou,
Karen Brettell and Frank Tang in New York; Writing by Herbert
Lash, Editing by Chizu Nomiyama and Andrew Hay)
