* Brent hits 32-month high on Libya oil attacks
* Middle East unrest adds $20-25 oil premium
* Analysts warn signs of demand destruction emerging
(Recasts throughout, previous SINGAPORE)
By Nia Williams
LONDON, April 8 (Reuters) - Oil surged to a 32-month high of
$124 on Friday as the prospect of long-term supply cuts stemming
from attacks on oilfields in Libya offset demand concerns
spurred by a major aftershock in Japan.
Exacerbating supply worries in the market was a report that
the Norway's North Sea Oseberg crude oil stream will load
118,000 barrels per day in May according to a trade source,
significantly down from the provisional programme of 160,000 bpd
in April.
By 0835 GMT Brent was up $1.63 to $124.30, a level last hit
in August 2008, and U.S. crude <CLc1> climbed $1.20 to $111.50
after earlier touching a peak of $111.68, the highest price
since September 2008.
"It looks like some of the fields in Libya are starting to
be the target for military strikes which is worrisome because it
means we have a risk of losing more crude for longer," said
Christophe Barret, commodities analyst at Credit Agricole.
Rebels and forces loyal to embattled leader Muammar Gaddafi
exchanged bitter accusations over who had attacked oilfields and
infrastructure vital to both sides. []
The seven-week old civil war has cut Libya's 1.6 million
barrels per day output by 80 percent to between 250,000 and
300,000, a senior government official said. []
Fellow OPEC member Nigeria postponed parliamentary elections
again in some areas, heightening concerns the delays could spark
violence, but polls will go ahead in most of the country on
Saturday as planned. []
Nigeria produces around 1.9 million bpd and its sweet, light
crude is prized as an alternatives to lost Libyan supply. But
production has long been vulnerable to attacks by militants
which could increase if political instability takes hold.
JAPAN AFTERSHOCK
Concerns over OPEC supplies offset demand worries
exacerbated by a 7.4-magnitude earthquake that struck Japan on
Thursday.
The world's third-largest crude importer is still recovering
from last month's devastating quake and tsunami that crippled a
nuclear power plant and damaged some refineries.
There were no reports of major damage to any energy
infrastructure and equity markets, which dipped on news of the
aftershock, opened higher on Friday. []
Surging oil, along with record gold and food prices, have
stoked inflationary concerns for governments worldwide due to
the potential adverse impact on economic growth of the rising
cost of foodstuffs and raw materials.
"Oil prices are at a point where we could begin to see
demand destruction," said Mike Wittner, head of commodities
research at Societe Generale.
"It already looks like the United States may just be showing
some signs of demand destruction. The United States is always
the country where you see the impact the most because there are
no subsidies and hardly any tax burden."
Unrest in the Arab world has added a $20-25 premium to oil
prices since the toppling of regimes in Tunisia and Egypt in the
last few months, Wittner said.
(Additional reporting by Randy Fabi, editing by William
Hardy)
