* As much as 100,000 bpd crude output shut in Libya
* Concern that other big producers could suffer outages
* Coming up: S&P/Case-Shiller U.S. house price index
(Updates prices, rewrites throughout)
By Claire Milhench
LONDON, Feb 22 (Reuters) - Both Brent <LCOc1> and U.S. crude
oil <CLc2> rallied to 2.5-year highs on Tuesday on concerns the
revolt in Libya could spread to other major oil producers in the
Middle East and North Africa.
At 0904 GMT Brent crude oil futures for April delivery were
up $2.19 to $107.93, after earlier touching $108.57, whilst U.S.
crude for April delivery was up at $98.15 as investors and
traders became increasingly nervous about contagion.
"Libya alone doesn't produce so much oil that there would be
a supply shortage ... even if there was a total collapse," said
Carsten Fritsch, an analyst at Commerzbank.
"It produces around 1.6 million barrels of oil per day, and
OPEC has spare capacity of up to 6 million barrels, so it is
more fears that this might spread to places like Nigeria, Kuwait
or the United Arab Emirates," he added.
Libya is the third-largest oil producer in Africa, and at
least some 100,000 barrels per day -- about 6 percent of the
country's production -- have been shut in.
Fighting has spread to the capital Tripoli. Amid reports
that African mercenaries are being used to crack down on
protesters, [] some army troops have switched sides
to the opposition.
European oil and gas firms have evacuated staff, and German
company Wintershall has wound down production as a precautionary
measure. []
The Arab League plans to hold an emergency meeting in Cairo
at 1500 GMT to discuss the Libyan revolt [].
World leaders have condemned the use of force against
protesters in Libya, where at least 233 have been killed,
according to Human Rights Watch. []
Cracks are now appearing among Gaddafi's supporters, with
some ambassadors resigning and some army officers calling on
soldiers to "join the people".
U.S. crude for March delivery <CLc1>, which expires on
Tuesday, was up over $3 to $94.26 after also earlier touching a
2.5-year high at $94.49. There was electronic trading in New
York on Monday, but no settlement close as the exchange was
closed for a holiday.
SUPPLY DISRUPTION
A wave of protests across North Africa has had little impact
on oil supply until now. The outages in Libya this week are the
first to impact supply.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Stories about regional unrest: []
Factbox on Libyan oil and gas: []
Column on the Brent/WTI spread: []
Libyan oil map: http://r.reuters.com/jem28r
Interactive factbox http://link.reuters.com/puk87r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
International Energy Agency (IEA) chief economist Fatih
Birol said on Tuesday that oil prices were in the danger zone
and could rise further if turmoil continued in the Middle East.
[]
"Oil prices are a serious risk for the global economic
recovery," Birol told reporters on the sidelines of a conference
in Indonesia.
Member states would consider releasing oil from their
emergency stocks if supplies were disrupted as a result of
continuing turmoil in the Middle East, he added. The IEA is
adviser to 28 industrialised nations on energy policy.
U.S. crude prices were also boosted as traders rushed to
cover short positions in the Brent/WTI spread, which blew out to
a record $16 a barrel last week.
(Additional reporting by Francis Kan, editing by Jane Baird)
