* Brent crude falls 51 cents to $114.92
* China's implied oil demand 2nd-highest on record in Feb
* Coming Up: U.S. retail sales for February; 1330 GMT
(Adds risk manager comments, details throughout)
By Alejandro Barbajosa
SINGAPORE, March 11 (Reuters) - Brent crude fell to below
$114 on Friday as a quiet start to the planned "day of rage" in
Saudi Arabia eased concern that the unrest would spread in the
world's top oil exporter, prompting investors to unwind
positions.
ICE April Brent crude fell 49 cents to $114.94 at
0700 GMT. It touched a 2-1/2-year high of $119.79 a barrel on
Feb. 24 as protests flared in Libya, disrupting oil output.
U.S. crude for April delivery fell 73 cents to
$101.97, after briefly falling by more than $1.
"We are getting a much needed correction; unless this day of
rage really explodes, the momentum is on the downside," said
Tony Nunan, a risk manager with Tokyo-based Mitsubishi Corp.
"I think it's gone a little bit too far. Eventually it
should go to $90 for WTI and $100 for Brent."
Saudi Arabia's capital was quiet on Friday ahead of a
planned day of demonstrations that will test whether activists
calling for reform online will succeed in taking their protests
to the streets. Police fired in the air to disperse protesting
Shi'ites on Thursday, and three people were injured in the
melee.
The unrest in the Middle East has so far taken precedence
over economic woes. Friday protests are also planned in other
Gulf countries such as Yemen, Kuwait and Bahrain, after the
day's religious prayers, inspired by upheavals in Tunisia and
Egypt.
The influence of Libya's conflict on the oil market would
probably diminish in coming days because traders had discounted
the loss production from what used to be the world's
12th-largest oil exporter, said Serene Lim, an analyst at ANZ.
Buyers of Libyan crude have adapted to the disruption,
sourcing supplies from elsewhere. Saudi Arabia has boosted
production to 9 million barrels per day (bpd), partly to
compensate for the lost output from the North African country.
"It seems that Libya is going to be sizeable but manageable
with the current spare capacity and inventory level," Nunan
said.
The Saudis say the kingdom's spare capacity stands at 3.5
million bpd, most of the surplus held by the Organization of the
Petroleum Exporting Countries.
GADDAFI COUNTER-ATTACKS
Forces loyal to Libyan leader Muammar Gaddafi have entered
the oil port of Ras Lanuf in the east of the country and are
fighting insurgents for control of the town, rebels said on
Friday.
Libyan rebels have lost momentum and are not likely to
dislodge Muammar Gaddafi from power, top U.S. intelligence
officials said on Thursday as Washington backed further away
from military action.
Gaddafi's son told rebels they faced a full-scale assault to
crush their three-week-old uprising as forces intensified their
counter-attack on the insurgent heartland, bombarding rebel
positions in the oil port of Ras Lanuf and Brega, another
rebel-held oil hub further east.
"As other countries, e.g. Iraq and Iran have shown, (oil)
operations are usually resilient against all but the most
devastating attacks and some resumption of output and processing
is likely once the conflict leaves the locality of the
facilities," said J.P. Morgan analysts headed by Lawrence
Eagles.
Weaker economic indicators from China and a downgrade of
Spain's credit rating are weighing on oil prices, Mitsubishi's
Nunan said, as the impact of high energy costs are felt in the
economy.
Japanese Economics Minister Kaoru Yosano said on Friday oil
price rises are likely to have a substantial negative impact on
the global economy.
'GET COMFORTABLE'
"Just when everybody was starting to get comfortable,
suddenly you've got another problem popping up: high oil prices"
Nunan said.
Euro zone leaders are set to agree a "competitiveness pact"
at a summit on Friday and will push Portugal to announce new
reforms to boost market confidence as they seek to draw a line
under the debt crisis.
Although unrest in the Middle East is adding a fear premium
to prompt spot U.S. crude, there appears to be no end to a
contango that has existed for over two years.
And rising oil prices seem to be having a limited effect on
consumption in China.
China's refineries processed crude at a record rate in
February, official data showed on Friday, as the world's
second-largest oil consumer churned out more fuel to power
irrigation work in drought-hit areas.
China's implied oil demand increased 10.3 percent from a
year earlier to 9.54 million barrel per day in February, the
second highest on record, Reuters calculations showed based on
official data on Friday.
Eyes will also be on the impact of China's fight against
inflation, with data published on Friday lending credence to the
view that it is more than midway through a sustained campaign of
monetary tightening launched nearly half a year
ago.
