UPDATE 6-Oil down more than $2 on Japan nuclear fears

                                
 * Brent falls as much as 2.2 pct to $111.19/bbl
                                
 * Japan's Nikkei share average plunges as panic grips Tokyo
                                
 * Saudi troops enter Bahrain to help calm protests
                                
 * Coming up: US API weekly inventory data 
                                
 
                                
 (Recasts throughout, changes dateline to London)
                                
 By Nia Williams
                                
 LONDON, March 15 (Reuters) - Brent crude fell by as much as
2.2 percent to below $112 as a deepening nuclear crisis in Japan
and rising radioactivity levels heightened risk aversion across
financial markets.
                                
 Japanese authorities warned that radiation levels had become
significantly higher around the nuclear power plant on Tuesday
after explosions at two reactors, and the French embassy said a
low-level radioactive wind could reach Tokyo within hours.
                                
  April Brent <LCOc1> fell $2.04 to $111.63 a barrel at 0922
GMT after trading as low as $111.19. Prices on Monday touched a
two-week low of $111.16, down more than 7 percent from a 2-1/2
year high hit on Feb. 24. U.S. crude for April <CLc1> dropped
$2.16 to $99.03.
                                
 "It's a combination of uncertainty and risk aversion," said
Commerzbank analyst Eugen Weinberg. "It's not really
fundamental concerns that Japan, one of the largest oil
consumers, will be missing over the next few months. It's more
sentiment that is depressing the prices of risk assets such as
equities and commodities."
                                
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
                                
Japan's unfolding disaster:     http://r.reuters.com/mak58r
                                
Japan graphics suite:           http://r.reuters.com/quh58r 
                                
How a meltdown can occur:       http://r.reuters.com/rah58r 
                                
Nuclear plants, quakes zones:   http://r.reuters.com/qah58r 
                                
World's costliest disasters:    http://r.reuters.com/jah58r 
                                
LIVE COVERAGE
                                
http://live.reuters.com/uk/Event/Japan_earthquake2  
                                
Japan quake rips through commodities, energy:
                                
http://link.reuters.com/bum58r  
                                
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>  
                                
Japanese stocks plunged more than 14 percent, heading for
their biggest drop since 1987 as concerns grew over the economic
impact of the unfolding disaster [.T]
                                
 Oil demand from Japan, the world's third-largest user, is
likely to decline in the short term as manufacturing and
transport slow but could then rise as the country seeks to
replace nuclear with oil-fired power during reconstruction
efforts.
                                
 The International Energy Agency (IEA) said on Tuesday global
oil demand was likely to be lower than previously forecast in
2011 as a result of a price shock and trimmed its forecast by
10,000 barrels to 1.44 million barrels per day. [ID:nWLA5303]
                                
 
                                
 SAUDI TROOPS IN BAHRAIN
                                
 Oil markets were also keeping a close eye on developments 
in the Middle East, where Saudi Arabia sent troops into Bahrain
on Monday to help calm weeks of protests by the Shi'ite Muslim
majority. [ID:nLDE72E02N]
                                
 Opponents of Bahrain's Sunni ruling family called the move a
declaration of war, while Iran denounced it as unacceptable and
the United States urged its nationals to leave the island, which
is home to the U.S. Navy's Fifth Fleet.
                                
 "Oil prices may have come under stronger pressure if we had
not had developments in the Middle East," said Weinberg. "The
market's most important concern is what is going on in Japan,
but if that is resolved focus will return to the Middle East."
                                
 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
                                
 Reuters Global Oil Forum will host an interactive Q+A with
IHS Global Insight Middle East specialist Samuel Ciszuk from
1530 GMT (1130 EDT) on Tuesday to discuss the political outlook
for the oil market. To visit Reuters Global Oil Forum:
                                
 rmchat://room/thomsreuters.com/Global_Oil_Forum
                                
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
                                
 Unrest has simmered across the Middle East for two months
after popular uprisings toppled the leaders of Tunisia and
Egypt, while Libya entered a civil war that has cut its oil
output by at least two-thirds from normal levels.
                                
 In Libya, Muammar Gaddafi's jets bombed rebels on Monday in
a counter-offensive that has pushed them back 100 miles (160 km)
in a week, far outpacing diplomatic efforts to impose a no-fly
zone to help the insurgents. [ID:nLDE72D26K]
                                
 On the data front, markets were looking towards weekly U.S.
inventory numbers from industry group American Petroleum
Institute. A Reuters poll indicated U.S. crude oil stockpiles
probably rose by 1.8 million barrels last week. [EIA/S]
                                
 (Additional reporting by Alejandro Barbajosa, editing by
Jane Baird)