* Fighting forces shut down of Zawiyah refinery
* OPEC says no plans for emergency meeting
* Coming Up: U.S. EIA weekly inventory report at 1530 GMT
(Updates prices, adds Saudi foreign minister comments)
By Claire Milhench
LONDON, March 9 (Reuters) - Oil rose over $1 on Wednesday to
trade at more than $114 a barrel as fighting intensified in
Libya, and an OPEC delegate said it saw no need to hold an
emergency meeting to ease supply fears.
Brent crude oil futures for April <LCOc1> were up 26 cents
to $113.32 a barrel at 1140 GMT, after pushing to an intraday
high of $114.39 following news that heavy fighting in Libya had
forced the shut down of one of its biggest refineries.
[].
The Zawiyah refinery is the biggest provider of gasoline in
Libya, and has a total capacity of 120,000 barrels per day.
The market also rallied after an OPEC delegate said the
group saw no need at present to to hold an emergency meeting to
discuss raising its oil output [].
Leading OPEC producer Saudi Arabia is already pumping more
oil -- up to 9 million barrels per day (bpd). []
"It's a fear trade," said Michael Hewson, an analyst at CMC
Markets. "It's about the fear of these troubles escalating --
there is some concern about how the Saudi Day of Rage will go on
Friday." []
He said that supply was not necessarily the issue, it was
more the perception that if unrest in the Middle East spread, it
could affect Saudi Arabia, or its ability to raise supply if the
need arises.
The Saudi Foreign Minister Prince Saud Al-Faisal, speaking
at a news conference on Wednesday, said Muslim clerics had
banned demonstrations in Saudi and that dialogue was the best
way to achieve what Saudis wanted. []
U.S. crude <CLc1> was down 30 cents at $104.74 as high
inventories at key delivery point Cushing, Oklahoma weighed on
prices. It had earlier reached an intraday high of $105.19.
Christopher Bellew, an oil trader at Bache Commodities in
London, said the continuing perception of prolonged trouble in
Libya was also driving the rally in Brent.
"As the outlook for Western intervention looks less likely
-- which would bring things to a quick conclusion -- then we are
looking at a prolonged struggle," he said.
"Gaddafi might defeat his opponents gradually, or his
opponents might end up going underground, fighting a guerilla
campaign which might involve them blowing up pipelines to try to
hurt Gaddafi economically," he said.
Libyan tanks and warplanes intensified their offensive
against rebels on Tuesday aiming to recover lost territory,
while world powers considered a no-fly zone over the country.
[] []
Speaking on television, Muammar Gaddafi said that "the
Libyan people" would take up arms against Western powers if they
tried to enforce a no-fly zone [].
The Pentagon said that the United States was still looking
at a range of military options on Libya []. Libyan
oil trade has been virtually paralysed as banks decline to clear
payments in dollars due to U.S. sanctions [].
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FACTBOX on emergency oil stockpiles: []
Graphics on U.S. strategic oil reserve, U.S. and other IEA
nations' reserves: http://link.reuters.com/cah48r
Graphics showing:
Middle East unrest http://r.reuters.com/nym77r
Oil price shocks http://r.reuters.com/qes28r
Those most reliant on oil http://r.reuters.com/dux28r
OECD commercial oil stocks http://link.reuters.com/qyg48r
Brent and WTI open interest http://r.reuters.com/cag48r
Graphic of U.S. oil stocks: http://r.reuters.com/sup48r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
U.S. crude inventories climbed a larger-than-expected 3.8
million barrels in the week to March 4, the American Petroleum
Institute (API) said on Tuesday, ahead of EIA statistics due on
Wednesday at 1530 GMT.
Saudi Basic Industries Corp (SABIC) <2010.SE> said that
growth in demand for petrochemicals this year should match 2010
levels, led by Asia and the Middle East, despite higher oil
prices. []
(Additional reporting by Alejandro Barbajosa, editing by
William Hardy)
