* Crude oil rise on supply worries, Mideast protests
* World stocks hold near 30-month highs
* Dollar climbs to 8-week high versus yen
By Wanfeng Zhou
NEW YORK, Feb 15 (Reuters) - Crude oil prices rose on
Tuesday as protests in Middle East countries raised concerns
about potential supply disruptions, while the U.S. dollar hit
an eight-week high versus the yen as Treasury yields advanced.
World stocks were little changed, erasing early gains after
a report showed U.S. retail sales rose less than expected in
January. Wall Street stocks fell at the open.
U.S. crude for March delivery <CLH1> staged a rally as New
York woke up, climbing as high as $85.97, rebounding from a
2-1/2-month low set in the previous session.
Last week's ousting of Egyptian President Hosni Mubarak and
the toppling of his Tunisian counterpart Zine al-Abidine Ben
Ali a month earlier have raised tensions among investors that
spreading unrest could disrupt oil supplies.
"We are seeing contagion from Tunisia and Egypt to other
countries that are more important for the oil markets," said
Christophe Barret, oil analyst at Credit Agricole Corporate and
Investment Bank.
World stocks as measured by MSCI <.MIWD00000PUS> were last
little changed on the day, holding near last week's 30-month
highs. Japan's Nikkei <> logged a 10-month closing high
and Europe's FTSEurofirst 300 <> was up 0.1 percent.
Stocks worldwide earlier got a boost after Chinese
inflation came in lower than expected at 4.9 percent in the
year to January, easing investor concerns that the world's No 2
economy will have to tighten monetary policy more aggressively.
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"The data probably slightly eased expectations of immediate
tightening, although in the overall scheme of things, this
doesn't change the fact that China is still in a tightening
phase," said Etsuko Yamashita, chief economist at SMBC.
Inflation pressures, particularly in emerging markets, have
been part of the motivation this year for investors to move
into developed stock markets.
DOLLAR AND YIELDS
The dollar climbed as high as 83.93 on trading platform
EBS, the highest level since mid-December, boosted by a rise in
U.S. Treasury yields.
Two-year notes <US2YT=RR> were last down 1/32 in price with
yields rising to 0.87 percent, up from 0.85 percent late
Monday. The note yields earlier tested technical support levels
with yields reaching 0.89 percent, their highest level since
May of last year.
But the dollar fell versus the euro <EUR=>, which was
boosted by demand from Middle East and Asian investors.
Analysts cautioned that euro sentiment remained fragile given
scepticism over whether euro zone leaders would come up with a
quick and effective solution to tackle its debt crisis.
Peripheral euro zone yield spreads have been widening in
the past week on uncertainty over a rescue package for the
region, and there was some disappointment after a meeting of
European finance ministers on Monday.
"Initial optimism at the beginning of the year over a
comprehensive bailout package in the euro zone is now starting
to fade away," said Lee Hardman, currency strategist at BTM
UFJ.
Data showed that the euro zone economy ended last year with
stable growth, but it failed to meet expectations for an
acceleration as expansion in the three largest nations fell
short of forecasts and Greece and Portugal contracted.
Countering this, German analyst and investor sentiment rose
slightly in February amid confidence in Germany's economic
recovery, a survey by the ZEW economic think tank showed.
(Additional reporting by Jeremy Gaunt and Claire Milhench in
London; Editing by Chizu Nomiyama)
