* Brent falls as much as 1 pct to below $110 on Japan
* Concern rises about impact of Japan crisis on growth
-analyst
* Coming Up: U.S. consumer prices, industrial output for
Feb.
By Alejandro Barbajosa
SINGAPORE, March 17 - Brent crude fell by as much as 1
percent on Thursday to below $110 as Japan's worsening nuclear
crisis buffeted stock markets, raising questions about the
impact of the earthquake on growth and energy demand.
Mounting fears as Japan takes desperate measures to cool
reactors at the stricken Fukushima nuclear plant overshadowed
supply worries caused by tensions in the Middle East.
"There is so much uncertainty in Japan and its ability to
drive economic recovery that it's something that is casting a
shadow on the outlook for global growth," said Ben Westmore, a
commodities analyst at National Australia Bank.
"While that shadow lasts, it's going to be difficult for oil
prices to go higher. With risk aversion some money has come out
of the oil market, and there is some aversion because the demand
outlook remains so uncertain."
Brent crude for May , the front-month contract after
April's expiry on Wednesday, fell as much as $1.15 to $109.45
and was down 51 cents at $110.09 at 0402 GMT. Prices have slid
almost 5 percent since Japan's earthquake and tsunami struck six
days ago, touching a three-week low of $107.35 on Wednesday.
Prices reached a 2-1/2-year intraday high of $119.79 on Feb.
24 as violence in Libya disrupted the country's oil output. OPEC
members including Saudi Arabia have increased production partly
to compensate for the loss of as much as two-thirds of Libyan
supplies, at the same time eroding spare capacity.
Bahraini forces used tanks and helicopters to drive
protesters from the streets on Wednesday clearing a camp that
had become a symbol of the Shi'ite Muslim uprising and drawing
rare criticism from their U.S. allies.
The violence that has transformed a crisis between the
island's majority Shi'ites and minority Sunnis into a regional
standoff between Sunni Gulf Arab states and non-Arab Shi'ite
power Iran.
Bahrain lies less than 100 kms from the hub of the Saudi oil
industry at Dhahran, including the world's largest oil fields,
oil terminal and processing plant. Recent demonstrations by
Saudi Shi'ites have also centred in the kingdom's Eastern
Province.
"It's all about Saudi Arabia," Westmore said. "Anything that
causes unrest in Saudi Arabia or causes a supply side event in
the Middle East" will cause a sharp rebound in prices, he said.
Still, the effect of gloomy financial markets on oil
prevailed on Thursday. Japanese stocks slid 3 percent on after a
surge in the yen to a record high stoked fears that a stronger
currency would compound the economic hit from a worsening
nuclear crisis.
Operators of the quake-crippled nuclear plant in Japan
dumped water on overheating reactors on Thursday while the
United States expressed growing alarm about leaking radiation
and urged its citizens to stay well clear of the area.
In Lybia, the battle for control of rebel capital Benghazi
looked just hours away after the Libyan army told people to
leave opposition-held locations and arms storage areas, but
residents said the city was quiet.
U.S. Crude for April shed 17 cents to $97.81.
(Editing by Himani Sarkar)
