UPDATE 10-Oil holds near 2-1/2 year highs on Libya revolt

                                
 * Gaddafi defiant, threatens more action against protests
                                
 * Libya declares force majeure on refined product exports
                                
 * Some 13 pct of Libyan crude production shut in
                                
 * Eastern Libya breaks free from Gaddafi's control
                                
 * Saudi stops short of adding oil to market
(Recasts, adds quotes, details, byline)
                                
 By David Sheppard
                                
 NEW YORK, Feb 22 (Reuters) - Oil prices held firm near
2-1/2 year highs on Tuesday as the revolt in Libya disrupted
more supplies, but there was no repeat of Monday's spike as
both OPEC and the IEA said they could help meet any shortage.
                                
 Turmoil in Libya drove prices as much as 6 percent higher
in the previous session, taking Brent crude in London to almost
$109 a barrel for the first time since 2008.
                                
 In a defiant speech on Tuesday, Libyan leader Muammar
Gaddafi refused to step aside on Tuesday and threatened tougher
action against protests, as rebel troops said eastern regions,
including major oilfields, had broken free from his rule.
                                
 Two more oil firms, Italy's ENI <ENI.MI> and Spain's Repsol
<REP.MC>, halted output due to nationwide unrest in Africa's
third-largest producer, cutting some 13 percent of its 1.6
million barrels per day (bpd) of crude oil production.
[ID:nLDE71L11T]
                                
"We've lost 300,000 bpd of production already with the
potential for further cuts to output and exports," said Andy
Lebow, a trader at MF Global in New York.
                                
 "The major underlying fear in the market is that these
protests spread in the region to even larger producers like
Saudi Arabia. While that might not look likely right now, even
a hint of real problems there could send prices vertical."
                                
 The following lists key facts regarding Libya's oil
industry:
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
                                
 Libyan oil map:  http://r.reuters.com/jem28r
                                
 Production and export graphics:
                                
 http://graphics.thomsonreuters.com/11/02/LibyaOil_SB.html
                                
 FACTBOX-Libya oil output,exports,customers [ID:nLDE71L0Y4]
                                
 Link; http://link.reuters.com/tuq28r
                                
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
                                
 But oil pared early gains after Saudi Arabian Oil Minister
Ali al-Naimi said the Organization of the Petroleum Exporting
Countries (OPEC) would meet any real supply shortages, though
he stopped short of announcing more oil production immediately
saying prices were driven primarily by speculation and fear.
[ID:nLDE71L1IF]
                                
 The International Energy Agency (IEA), which advises
industrial countries on energy policy, also said member
countries may decide to release emergency oil stocks if the
situation in Libya created a real physical shortage in the
market.[ID:nLDE71L0DA]
                                
 The IEA rarely opens the taps but members hold 1.6 billion
barrels of emergency oil stocks. They were last tapped in 2005
after Hurricane Katrina crippled U.S. Gulf oil operations.
                                
 At 2:09 p.m. EST (1911 GMT0, Brent crude <LCOc1> traded up
11 cents to $105.85 a barrel, off earlier highs of $108.57 a
barrel. Brent hit a 2-1/2 year high of $108.70 a barrel on
Monday.
                                
 U.S. crude <CLc1> for March delivery, which expires at the
end of the session, rose $7.13 to $93.34 a barrel, after
earlier touching $94.49, the highest level since October 2008.
The more actively traded April contract gained $5.27 to trade
at $94.98 a barrel.
                                
 The stronger gains in U.S. crude was partly explained by
the fact that while the contract was active in electronic
trading on Monday, there was no settlement as the exchange in
New York was closed for the Presidents Day holiday.
                                
 Oil product traders operating in the Mediterranean also
said exports from Libya were severely disrupted on Tuesday, but
some traders said cargoes were continuing to load.
[ID:nLDE71L2EU]
                                
 Saudi Arabia's Naimi, speaking on the sidelines of the
International Energy Forum in Riyadh, said he saw no shortage
in the market despite the unrest in Libya, and said worldwide
oil spare oil capacity was between 5-6 million bpd.
                                
 Around two-thirds of that is estimated to be in Saudi
Arabia, the world's largest oil exporter.
                                
 "What I would like you to convey to the market: right now
there is absolutely no shortage of supply," Naimi told a news
conference.
                                
 "I think this is a situation of fear, concern which will be
very short term and will have no long range effect," adding he
did not see prices spiking towards $150 a barrel as they did in
2008, before crashing as the economic crisis took hold.
  (Reporting by David Sheppard, Matthew Robinson and Gene Ramos
in New York; Claire Milhench in London and Francis Kan in
Singapore; Editing by David Gregorio and Sofina Mirza-Reid)