* Brent headed for 22 pct qtrly gain, biggest since Q2 2009
* Coming Up: U.S. weekly initial jobless claims; 1230 GMT
(Updates prices, adds quote, details)
By Jessica Donati
LONDON, March 31 (Reuters) - Brent crude rose over $1 on
Thursday to $116.78 a barrel, heading for its biggest quarterly
gain in almost 2 years, as Middle East supply worries led
concerns.
Traders, analysts and investors see a new floor for prices
around $100 a barrel, supported by supply risks and expanding
economies after the most turbulent and volatile quarter for the
oil market since the end of 2008.
Brent crude for May <LCOc1> were up $1.24 cents to $116.37
barrel at 1034 GMT, less than $4 from a 2-1/2-year high near
$120 on Feb. 24. Brent fell below $108 in the aftermath of
Japan's earthquake.
U.S. crude <CLc1> was up $1.08 cents to $105.35.
Worries mounted about Syria, where more than 60 people have
been killed in protests, as President Bashar al-Assad defied
calls to lift a decades-old emergency law despite hundreds
marching in Latakia chanting "freedom" on Wednesday.
[]
"Friday prayers may be a key issue supporting the market
now, and some of the focus is starting to shift back to Japan
and the cost of rebuilding the country," said Thorbjoern Bak
Jensen, an analyst at Global Risk Management.
Japan's oil product sales rose 0.8 percent in February from
a year earlier as improvement in the economy helped boost
gasoline demand for a fourth straight month. The outlook for
consumption in the aftermath of the earthquake and tsunami
remained uncertain. []
Lost nuclear power and reconstruction efforts could boost
Japanese demand for oil to generate electricity. The
International Energy Agency has said an additional 200,000
barrels per day will be needed to fill in after Japan's nuclear
disaster. But traders say the impact on world supply could be
higher. []
NUCLEAR DEBATE
A parcel bomb attack on a nuclear lobby group in Switzerland
highighted the backlash against nuclear development plans in the
aftermath of the Japanese disaster at Fukushima. []
"The nuclear issue in Japan could have quite significant
consequences. A lot of countries are now debating nuclear and
new building is on hold," a gasoil trader said.
Switzerland has halted the approvals process for three new
nuclear power stations, while Germany quickly suspended
operations at seven ageing nuclear plants.
Austria has demanded pan-European 'stress tests', Italy
announced a one-year moratorium on new plants and Bulgaria
tightened restrictions on its Belene nuclear project near a
quake zone.
Others argue that lower Japanese output could ultimately
weaken imports, balancing against a further drop in oil supply
from the Middle East.
"There seems to be a statistical surplus in the system given
that Saudi production has more or less offset the Libyan
shortfall, while weak Japanese imports will go a long way in
further alleviating demand pressures," Edward Meir, senior
commodity analyst at MF Global, said in a note.
WAR IN LIBYA
The prospect of a protracted civil war in Libya remained as
forces loyal to Libyan leader Muammar Gaddafi regained key oil
ports at Ras Lanuf and Brega on Wednesday, highlighting the
vulnerability of rebel forces in the absence of Western air
strikes. []
Gaddafi's foreign minister defected and flew to Britain on
Wednesday while government sources told Reuters that U.S.
President Barack Obama had signed a secret order authorising
covert U.S. government support for rebel forces. []
[]
The United States is part of a coalition, with NATO members
and some Arab states, which is conducting air strikes on Libyan
government forces under a U.N. mandate aimed at protecting
civilians opposing Gaddafi.
Libyan oil shipments remain at a standstill, with no one
attempting to hire tankers due to violence and the impact of
sanctions, shipping sources said on Wednesday. []
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More on Middle East unrest: [] []
Libya graphics http: //link.reuters.com/neg68r
Interactive graphic http://link.reuters.com/puk87r
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GLOBAL RECOVERY
U.S. private employers added more than 200,000 jobs in
March, a report showed on Wednesday, ahead of government data on
March non-farm payrolls due on Friday. []
Weekly U.S. initial jobless claims due at 1230 GMT for the
week ending March 26 are likely to drop to their lowest in four
weeks and the second lowest since July 2008, according to IFR
Markets, a Thomson Reuters news and market analysis service.
"The second quarter is a good period, and oil demand should
be increasing," said Tetsu Emori, a Tokyo-based commodities fund
manager at Astmax Investments, adding that he expected U.S.
crude to end the year close to $120.
(Additional reporting by Claire Milhench and Alejandro
Barbajosa; editing by Jason Neely)
