* Volatile Mideast mix points to upside risks - analysts
* TECHNICALS: Brent is temporarily neutral []
* Coming Up: U.S. GDP final Q4 estimate at 1230 GMT
(Updates throughout, changes dateline, pvs SINGAPORE)
By Christopher Johnson
LONDON, March 25 (Reuters) - Oil rose on Friday with Brent
crude near $116, and analysts saw the risk of another price
spike as unrest bubbled across the Middle East and western
powers continued a military campaign in Libya.
Friday protests were planned in Yemen and Bahrain, and
investors kept a close eye on Syria, where at least 37 have died
following protests against the government of President Bashar
al-Assad. []
Western warplanes struck Libyan ground forces on Friday,
pursuing a campaign that has yet to deliver a crippling blow to
Muammar Gaddafi's tanks and artillery. []
Brent crude for May <CLc1> rose 5 cents to $115.77 a barrel
by 1035 GMT, about $4 from a 2-1/2-year high just below $120
reached a month ago. U.S. crude <CLc1> rose 20 cents to $105.80.
Libyan oil exports of about 1.3 million barrels per day
(bpd) have virtually vanished, eroding global spare capacity as
Saudi Arabia and other members of the Organization of the
Petroleum Exporting Countries have increased production.
This has heightened talk of the risk of higher prices as
unrest continues across the Middle East and North Africa, which
combined produce more than a third of the world's oil.
"My gut feeling is that the oil market is more likely to go
up than down," said Tony Machacek, a broker at Bache Commodities
in London. "There are so many unknowns that could hit supply."
Machacek said the ICE Brent options market had "a
significant call skew", indicating that "generally people think
there is more risk of movement to the upside".
Reflecting this view, J.P. Morgan analysts headed by
Lawrence Eagles, on Friday raised their forecast for Brent in
the second quarter to $118 from $105, saying "dips in
volatility, like the one that we saw this week, appear to offer
good entry points for hedging strategies. []
"So long as ongoing problems in the Middle East continue to
elevate risks of a further supply disruption, there is a strong
likelihood of a price spike in the second quarter as the market
demands additional oil to meet summer demand," J.P. Morgan said.
Barclays Capital has also raised its projection for 2011
Brent to $112 from $91. []
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More on Middle East unrest: [] []
Libya Graphics http://link.reuters.com/neg68r
Interactive graphic http://link.reuters.com/puk87r
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"DAY OF DEPARTURE"
In Yemen, the opposition has stepped up efforts to remove
President Ali Abdullah Saleh, dismissing his offer to stand down
after an election at the end of the year. []
Protesters plan a "Day of Departure" rally in a country that
sits near shipping lanes that skirt the Arabian peninsula and
from where al Qaeda has attempted attacks on Saudi Arabia.
In Bahrain, a small island less than 100 km from the hub of
the Saudi Arabian oil industry, opposition activists said they
planned to hold a day of demonstrations on Friday in defiance of
a ban on all public gatherings. []
J.P. Morgan said extra OPEC supplies were needed in the
run-up to northern hemisphere summer demand, before the producer
group's next meeting in June.
"By then, it will be too late to prevent higher prices and
could extend what we see as a mid-quarter blip to a much more
serious and destabilising price surge that could distort
stock-holding behaviour and economic growth," the bank said.
Oil prices will stay above $100 a barrel through 2013, a
Reuters poll showed, as analysts sharply revised their forecasts
upwards on expectations of a protracted outage in Libya and
uncertainty elsewhere. []
The volatile mix of headlines from the Middle East over the
past few weeks has taken its toll on trading volumes as
investors await the next turn of events.
Not all analysts are bullish. Edward Meir, a senior
commodity analyst at brokers MF Global, suggested on Friday that
the oil market could be overdone.
"If we assume that Libya's 1 million barrels a day of
exports has been more or less replaced by Saudi production
(leaving aside crude qualities for the moment), this means that
output from the Middle East is relatively unchanged," he said.
Concerns about Portugal's sovereign debt have also slowed
oil price gains this week, after the country's prime minister
resigned on Wednesday, falling victim to the European Union's
rolling financial crisis and prompting Standard & Poor's to
downgrade the credit ratings for the nation. []
European leaders have agreed to raise their financial rescue
fund to 440 billion euros ($623 billion) by June.
[]
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by Jane Baird)
