* 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 rose
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 quickly dismissed 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 $1.99 at $113.79 a
barrel by 1517 GMT, paring gains slightly after rising to
intra-day highs of $114.35 a barrel earlier in the session.
U.S. crude futures <CLc1> were up $1.35 cents at $98.32 a
barrel, after touching earlier intra-day highs of $98.77.
Worries about the unrest in the region drove Saudi Arabia's
benchmark stock index <.TASI> to 20-month lows.
"The same political risk is driving prices -- what is
happening in Libya now and, according to the news on my screen,
there are problems in Iran. Those are two very big suppliers and
we can't take disruption from both, so there is the spike in
prices," Credit Agricole CIB analyst Christophe Barret said.
Iranian security forces fired teargas amid clashes with
opposition supporters in Tehran on Tuesday as demonstrators
rallied to demand the release of two opposition leaders,
according to an opposition website. []
In Libya, the chairman of the National Oil Corporation,
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, while Iraq said oil exports rose in February and
preliminary data showed Nigerian crude oil exports will rise
sharply in April. [] []
[]
"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's, spare output
capacity has become a vital cushion 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.
[]
Federal Reserve Chairman Ben Bernanke on Tuesday downplayed
the effect of high oil prices on the U.S. economy but said it
could lead to weaker growth and higher inflation if sustained.
[]
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. [] []
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
Jane Baird)
