* Libya unrest cuts oil output by as much as 1.2 mln bbls
* Market calms after whipsaw trading session on Thursday
* Technicals point to $113 oil in near-term, $158 in 2011
By Randy Fabi
SINGAPORE, Feb 25 (Reuters) - Oil eased below $111 on Friday
as top world exporter Saudi Arabia sought to assure key
importers it would fill any supply shortfall left by beleaguered
fellow OPEC member Libya, soothing fears over a disruption in
supplies that had carried prices to a 2-1/2-year high a day
earlier.
Unrest in the oil-rich desert nation has slashed a big chunk
of Libya's output of 1.6 million barrels per day, with estimates
of capacity shut down ranging from 500,000 to 1.2 million bpd.
Brent crude for April delivery eased 79 cents to
$110.57 a barrel by 0233 GMT, after climbing to a 2-1/2-year
high of $119.79 the previous session before settling at $111.36.
U.S. crude traded 63 cents lower at $96.65, after
surging as high as $103.41 on Thursday, the highest since
September 2008.
"Even though prices have receded, the market remains on
edge," said Victor Shum, an analyst with energy consultancy
Purvin & Gertz.
"Anxiety and concerns about the people's revolt spreading to
other parts of the Middle East and North Africa continue to
support the markets."
Prices fluctuated more than $10 in whipsaw trading on
Thursday, the widest trading range since September 2008, as the
market reacted to rapidly unfolding events in Libya.
"When geopolitics in the Middle East are at play in the oil
markets, all conventional bets on the direction of oil prices
based on supply and demand fundamentals, or economic variables,
are off," analysts at BNP Paribas said in a research note.
Reuters market analyst Wang Tao said technical charts showed
Brent would recover to $113 a barrel in the next day or two on a
steady climb to as high as $158 this year.
EYES ON LIBYA
Forces loyal to Muammar Gaddafi hit back at rebels holding
towns near the Libyan capital on Thursday but there was no sign
they had broken the momentum of the opposition gains.
The International Energy Agency estimated the unrest has cut
500,000 to 750,000 bpd of Libyan output. Italian oil company ENI
, the biggest foreign operator, estimated 1.2 million
bpd had been shut down as international firms pull out workers.
With a spike in oil prices threatening the global economic
recovery, the IEA called on OPEC to draw on excess oil
production capacity if required to counter Libyan supply losses.
Saudi Arabia was in talks with European companies affected
by the disruption in Libyan supply and was willing and able to
plug any gaps in supply, senior Saudi sources said on Thursday.
The Saudi sources said the country was able to pump more of
the kind of high-quality crude produced by Libya and it could be
shipped quickly to Europe with the help of a pipeline that
crosses the kingdom.
(Reporting by Randy Fabi)
