* Brent crude nears $120 a barrel as Libya output falls
* Swiss franc hits record high as US dollar falls broadly
* U.S. stocks halt this week's slide, hover at break-even
(Updates equity market prices)
By Herbert Lash
NEW YORK, Feb 24 (Reuters) - Oil surged to almost $120 a
barrel and the safe-haven Swiss franc hit a record high on
Thursday on fears turmoil in Libya could spread, but gold eased
on talk Saudi Arabia could boost its crude output.
U.S. equity markets also hovered near break-even after this
week's sharp slide. Analysts said it was too soon to say a
long-expected sell-off on Wall Street was over with unrest in
North Africa and the Middle East still alive. For details
please see: []
The escalating violence in Libya, home to Africa's largest
proven oil reserves, lifted benchmark Brent crude oil to its
highest level since August 2008 and kindled concerns of an
inflationary spike that might stall global recovery.
[]
This week's relentless surge in oil prices stung the U.S.
dollar against major currencies. The Swiss franc benefited from
the turmoil in North Africa while the euro extended gains
against the dollar on expectations interest rates in the euro
zone will rise earlier than those in the United States.
The dollar fell to a record low of 0.9240 of a Swiss franc
<CHF=EBS> on electronic trading platform EBS.
"The problem with civil unrest is that we don't really know
when it's going to end. It might get worse and the supply of
oil might come down even more, and that's a big concern for the
market," said Sebastian Lynar, sales trader at IG Index.
Copper, considered a harbinger of economic sentiment,
firmed after better than expected U.S. jobless data, but it
remained under pressure on concerns that higher oil prices
driven by violence in Libya could slow economic growth.
[]
Brent crude futures for April delivery <LCOc1> spiked to
$119.79 a barrel before easing to $114.55, up $3.30 on the
day.
U.S. light sweet crude oil <CLc1> also rose but remained
under the $100 mark it touched on Wednesday for the first time
since October 2008.
Spot gold prices <XAU=> rose slightly to $1,412.00 an
ounce, up just $2.05.
The Financial Times quoted an unnamed official as saying
Saudi Arabia was in active talks with European refiners who may
be hit by a disruption in Libyan exports.
"You can't see a quick resolution to what's going on, but I
see the market's fall as an over-reaction," said Caroline
Vincent, fund manager at Cavendish Asset Management. "There are
worries about oil prices and inflation, but Saudi Arabia has
said it will meet the oil shortfall."
Forces loyal to Muammar Gaddafi launched a counter-attack
but rebels threatened the Libyan leader's grip on power by
seizing important towns close to the capital and bringing the
tide of rebellion ever closer to his power base.
[]
Disruption to Libya's output has cut at least 400,000 of
the country's 1.6 million barrels per day production, Reuters
calculations show. []
Italian oil company ENI said the decline was greater,
estimating 1.2 million barrels of oil had been removed from the
market.
The Nasdaq and benchmark S&P 500 pared earlier slight gains
to trade a little bit lower.
The Dow Jones industrial average <> was down 67.51
points, or 0.56 percent, at 12,038.27. The Standard & Poor's
500 Index <.SPX> was down 5.00 points, or 0.38 percent, at
1,302.40. The Nasdaq Composite Index <> was down 2.14
points, or 0.08 percent, at 2,720.85
European shares closed lower and were headed for their
biggest weekly fall in nearly eight months,
The FTSEurofirst 300 <> index of top shares fell 0.5
percent to a provisional close of 1,145.81 points.
U.S. Treasury debt prices rose on continued support from
safe-haven buying as some analysts forecast yields would fall
even lower in the near term. The benchmark 10-year U.S.
Treasury note <US10YT=RR> was up 17/32 in price to yield 3.42
percent. []
The euro <EUR=> was up 0.29 percent at $1.3786. Against the
yen, the dollar <JPY=> was down 1.01 percent at 81.66.
(Additional reporting by Gertrude Chavez-Dreyfuss in New York;
Amanda Cooper, Naomi Tajitsu, Christopher Johnson, Harpreet
Bhal in London; Writing by Herbert Lash, Editing by Andrew
Hay)
