* Almost half of Libya oil output cut- Libya NOC chairman
* U.S. crude stockpiles likely rose for 7th straight week
* World Bank says strong oil prices will not derail recovery
(Updates throughout)
By Zaida Espana
LONDON, March 1 (Reuters) - Brent crude oil futures traded
above $113 a barrel on Tuesday as a jittery market jumped higher
on a report, soon denied, of Saudi involvement in Bahrain.
A Saudi Arabian official denied a report in an Egyptian
newspaper that the kingdom had sent tanks to neighbour Bahrain
to try to quell protests there. []
April Brent futures <LCOc1> were up $1.40 at $113.20 a
barrel by 1423 GMT. U.S. crude futures <CLc1> were up 87 cents
at $97.83 a barrel.
Worries about the unrest in the region saw Saudi Arabia's
benchmark stock index <.TASI> plunge to 20-month lows.
Libya's National Oil Corporation chairman, Shokri Ghanem,
said its oil installations were undamaged, although output
halved as a result of the departure of oil workers. []
Saudi Arabia has sought to calm the market by pledging to
pump more. Iraq also announced an increase in oil exports in
February and preliminary data showed Nigerian crude oil exports
will rise sharply in April. [] []
[]
"Saudi Arabia has compensated for supply losses in Libya,
which has prevented a further price rise so far. The biggest
OPEC producer is likely to be already producing more than 9
million barrels of crude oil a day at present," Commerzbank
analysts said in a note.
"Saudi Arabia's spare capacities are thus another good 3
million barrels a day. The market is likely to get nervous, at
the latest, when spare capacities drop below 2 million barrels a
day."
OPEC, and in particular Saudi Arabia, spare output capacity
has become a vital cusion of potential supply disruption.
[]
In Oman, a small oil producer, the army fired in the air,
wounding one person, as it moved to disperse protesters near the
northern port of Sohar. []
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Middle East unrest graphics http://r.reuters.com/nym77r
Who is in control in Libya http://r.reuters.com/jem28r
Map of control in Libya http://r.reuters.com/fug38r
Countries most reliant on oil http://r.reuters.com/dux28r
Calculator: Oil price impact on GDP
http://r.reuters.com/jux28r
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OIL SPIKES COULD HIT GROWTH
Investors awaited the latest U.S. weekly crude inventories
data from industry group American Petroleum Institute at 1630
GMT.
Economists polled by Reuters expect an increase in
stockpiles for a seventh consecutive week on higher imports.
[]
The dollar hit its lowest in three and a half months versus
a currency basket on Tuesday on the view U.S. monetary policy
will remain loose, as the market awaited testimony by Federal
Reserve Chairman Ben Bernanke. []
Bernanke is likely to remain sceptical about the strength of
the economic recovery in testimony on Tuesday, despite recent
data pointing to improvement, signalling the central bank is
unlikely to cut short its $600 billion stimulus plan.
[]
A sustained period of higher oil prices would significantly
affect developing economies but is unlikely to derail their
strong recovery since the financial crisis, a senior World Bank
official said on Monday. [] []
The European Commission expects oil prices to average around
$100 a barrel this year, EU economic and monetary affairs
commissioner Olli Rehn said on Tuesday. []
In China, manufacturing growth slowed in February to a
six-month low, according to an official survey, as the
government's sustained campaign to tame inflation weighed on
industrial activity. []
(Additional reporting by Florence Tan in Singapore; editing by
William Hardy)
