* Saudi Arabia raises output by about 700,000 bpd
* Key Libyan oil terminal falls into rebel hands
* U.S. eyes sanctions as Gaddafi forces hit opponents
* Coming up: U.S. personal income, Monday
By Gene Ramos
NEW YORK, Feb 25 (Reuters) - Brent oil rose in volatile
trade on Friday to hold above $112 a barrel but below
Thursday's 2-1/2-year highs after Saudi Arabia raised output to
calm fears of supply disruptions sparked by Libya's uprising.
Saudi Arabia has boosted output by more than 700,000
barrels per day, to a level exceeding 9 million bpd, a senior
industry source familiar with Saudi production told Reuters.
[]
Worries about the worsening situation in Libya, where oil
outages have risen to as much as three quarters of its 1.6
million bpd output, spurred short-covering before the weekend.
Those moves were further stoked by news that the United
States was imposing sanctions and cutting diplomatic ties with
Libya as Muammar Gaddafi's security forces cracked down against
a widening revolt against his rule. []
"I don't think many traders are comfortable being short
over the weekend," said Tom Bentz, a broker at BNP Paribas
Commodity Futures in New York.
Estimates of Libya's supply loss could not be confirmed,
however, with conditions unsettled as rebels fought to wrest
control of oilfields and terminals in the east of the country
from Gaddafi loyalists. []
On Thursday, the disruptions pushed Brent to almost $120
and U.S. crude to more than $103. Brent shot ahead as more of
Libya's oil exports go to European refiners than to those in
the United States.
In London, Brent futures <LCOc1> for April closed up 78
cents at $112.14 a barrel, the highest weekly settlement since
Aug. 21, 2008. They peaked at $113.91, below Thursday's high of
$119.79, the loftiest intraday since August 2008.
U.S. April crude futures <CLc1> settled up 60 cents at
$97.88, the highest weekly close since September 2008, and
reached $99.20 earlier. That was well below Thursday's intraday
peak of $103.41, also the highest since September 2008.
Brent's premium against U.S. crude <CL-LCO=R> rose to
$14.26, from $14.08 at the close on Thursday, when the Brent
spread against U.S. benchmark West Texas Intermediate rocketed
to a record $16.91.
SAUDI MOVE, U.S. DATA
"Fears that the unrest in Libya could turn into a civil war
and wipe out its oil production have been offset by assurances
from Saudi Arabia that it is raising output," said Gene
McGillian, analyst at Tradition Energy in Stamford,
Connecticut.
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Brent graphic: http://link.reuters.com/tuf38r
Unrest in Middle East, North Africa: []
Interactive factbox http://link.reuters.com/puk87r
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U.S. crude drew support from a rise in consumer confidence
to a three-year high in February, suggesting the economy
remained on a solid footing despite high gasoline prices,
according to a ThomsonReuters/University of Michigan survey.
[]
That optimism was tempered by the latest reading of
fourth-quarter 2010 economic growth, which showed the U.S.
economy grew more slowly than expected.
(Additional reporting by Ikuko Kurahone and Nia Williams in
London, Randy Fabi in Singapore; Editing by Dale Hudson)
