* U.S. says no reason to believe Gaddafi dead
* ENI says up to 1.2 million bpd of Libyan output hit
* Saudi Arabia in talks with European refiners on supplies
* Coming up: U.S. preliminary Q4 GDP, 8:30 a.m. EST Friday
(Adds quote in paragraphs 5-6, options requirement in par 7)
By Gene Ramos and Matthew Robinson
NEW YORK, Feb 24 (Reuters) - Oil sank from 2-1/2-year highs
near $120 a barrel on Thursday in strong, late-day
profit-taking following an unsubstantiated rumor Muammar
Gaddafi had been shot and Saudi Arabia's assurances it can
counter Libyan supply disruptions.
A U.S. official said Washington had no reason to believe
the Libyan leader was dead after the rumor swept through oil
markets and sent prices tumbling more than $2 a barrel just
before settlement. []
Prices surged in early activity on news the Libyan revolt
had caused large disruptions in the OPEC nation's oil supplies
-- potentially up to three-quarters of output -- though the
scale of the loss could not be confirmed. []
Markets had earlier eased on news top OPEC exporter Saudi
Arabia was in talks with European refiners affected by the
disruption to fill any supply gaps. []
"After three days of moving to the upside, the market was
prone to profit-taking and then we heard the rumor that Gaddafi
was dead," said Peter Beutel, president of Cameron Hanover in
New Canaan, Connecticut.
"It was almost like the fever was breaking anyway, and this
was the bucket of water that brought the temperature down
quickly."
Traders said an increase in margin requirements for U.S.
crude oil futures on the New York Mercantile Exchange and the
Intercontinental Exchange in London also added pressure to
prices late in the day. []
Brent crude <LCOc1> hit $119.79 a barrel -- the highest
since August 2008 -- in early activity then dropped to $110.51
late, marking the widest trading range for the benchmark since
September 2008. Brent settled up 11 cents at $111.36 a barrel,
dropping more than $1 in post-settlement activity.
U.S. crude <CLc1> settled down 82 cents at $97.28 a barrel,
after touching $103.41, the highest since September 2008.
Brent's performance pushed its premium to U.S. oil, which
has been weighed down by large stocks at the Cushing, Oklahoma
delivery point for the New York Mercantile Exchange's U.S. oil
contract, out more than a dollar to over $14 a barrel.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphics on crude prices, volumes and outlook:
http://link.reuters.com/pab38r
http://link.reuters.com/nab38r
US oil price rise graphic: http://link.reuters.com/byv28r
Unrest in Mideast, N. Africa: []
Analysis on impact on Libyan oil sector: []
Factbox on Libyan oil and gas: []
Interactive factbox http://link.reuters.com/puk87r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
As concerns mounted about the impact of higher oil prices
on economic growth, the International Energy Agency again
called on OPEC to draw on excess oil production capacity if
required to counter Libyan supply losses. []
The IEA estimates the unrest has cut off 500,000 to 750,000
barrels per day (bpd) of Libyan output. Italian oil company ENI
<ENI.MI>, the biggest foreign operator, estimated 1.2 million
bpd of the country's 1.6 million bpd had been shut down as
international firms pull out workers.
Options trade volumes for the New York Mercantile
Exchange's U.S. oil contract hit a record on Wednesday as the
unrest sent prices higher, with traders saying bets were being
laid for a spike to $120 a barrel by April. []
While traders focused on Libya, some support also came
after U.S. Energy Information Administration data showed a
lower-than-expected build in domestic crude inventories and
hefty drawdowns in gasoline and distillate stocks last week.
[]
(Reporting by Matthew Robinson, Gene Ramos, Selam Gebrekidan,
David Sheppard, Janet McGurty, Jeffrey Kerr in New York;
Christopher Johnson, Nia Williams, Emma Farge, Claire Milhench
and Dmitry Zhdannikov in London; Editing by Dale Hudson)
