* Brent set for 23 pct qtrly gain, biggest since Q2 2008
* U.S. crude set for near 16 percent quarterly gain
* Coming up: U.S. March nonfarm payrolls data Friday
(Recasts, updates prices and market activity, changes byline
and moves dateline from previous LONDON)
By Robert Gibbons
NEW YORK, March 31 (Reuters) - Oil prices rose on Thursday
on the last day of the quarter, with Brent heading for its
second biggest quarterly rise as Middle East protests and
unrest and Libya's conflict kept threats to supply in focus.
U.S. crude prices rallied to within 18 cents, but failed to
push above, its 2-1/2 year peak of $106.95 from March 7 and
also headed to a double-digit quarterly gain.
Oil prices built on early gains when a U.S. government
report showed jobless claims fell last week, the report
arriving a day before the closely watched March nonfarm
payrolls report. []
Adding support, the Institute for Supply Management-Chicago
said its employment index in March hit the highest level since
December 1983, though its overall business barometer dipped in
February. []
Oil prices continue to be supported by geopolitical supply
risks and economic growth after the most turbulent and volatile
quarter for the oil market since the end of 2008, analysts
said.
Brent crude for May <LCOc1> rose $2.01 to $117.14 a barrel
by 12:13 p.m. (1613 GMT), having jumped earlier to $117.70.
May Brent must push above a $118.42 contract high ahead of
the front-month 2-1/2-year high near $120 struck on Feb. 24.
Brent had fallen below $108 in the aftermath of Japan's
March 11 earthquake and tsunami, but was on course to finish
the quarter up over 23 percent.
U.S. crude <CLc1> rose $1.93 to $106.20, having earlier hit
$106.77 and on track for a near 16 percent quarterly gain.
Trading volumes remained tepid, but neared 300,000 lots
traded for both Brent and U.S. crudes.
CONFLICT IN LIBYA
The prospect of a protracted conflict in Libya remained as
forces loyal to Muammar Gaddafi took back oil ports at Ras
Lanuf and Brega. Rebels massed for a counter-attack in eastern
Libya on Thursday, both encouraged by and wary of news of
covert U.S. support and the defection of Gaddafi's foreign
minister. []
Libya's top oil official Shokri Ghanem said he remained in
Tripoli and the country was continuing to produce some oil,
although output was much reduced. []
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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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MIDDLE EAST UNREST
Investors also eyed Bahrain, where dozens were missing and
more than 300 were detained after a crackdown targeting
activists and Shi'ites, the opposition said. []
"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.
The conclusion of Friday prayers has been a favored time
for protests in the region.
Protests and unrest in Syria and Yemen have also been part
of the geopolitical risk premium.
(Additional reporting by Jessica Donati, Nia Williams, Claire
Milhench in London and Alejandro Barbajosa in Singapore;
Editing by Marguerita Choy)
