* Oil futures hit two-and-a-half-year high on output
disruption
* Gold regains some lost ground, trend still bullish
* Food, energy prices seen as risk for Asia stocks
By Nick Macfie
SINGAPORE, Feb 23 (Reuters) - U.S. crude oil futures climbed
to 2-1/2-year highs on Wednesday on fears that output
disruptions in Libya may spread to other Middle East oil
producers and hurt global economic growth, helping push Asian
stocks lower.
Popular protests have toppled entrenched leaders in Egypt
and Tunisia, but a defiant Muammar Gaddafi, the world's
second-longest-serving leader after the Sultan of Brunei, said
he would not be forced out by the deadly unrest sweeping
Africa's third-largest oil producer.
At last three oil companies have halted output in Libya,
which pumps 1.6 million barrels per day, or nearly 2 percent of
global supply.
U.S. crude rose as high as $96.08 a barrel, its
strongest level since October 2008. By 0600 GMT, the contract
had trimmed gains to trade at $95.50, up 8 cents on the day.
Brent crude rose 77 cents to $106.55 a barrel.
On Monday, Brent hit a 2-1/2-year high of $108.70.
Higher energy prices could impede economic growth and
hurt corporate profits even as they fuel inflationary pressures,
complicating policymaking for governments and central
banks.
"Even if Libya completely shuts down, there isn't a supply
issue. But (U.S. crude) could go to $100, given the potential
for this contagion to spread to Saudi Arabia," said Jonathan
Barratt, managing director of Commodity Broking Services in
Sydney.
Asia stocks fell as investors sold off riskier assets.
Japan's Nikkei 225 index closed down 0.8 percent, while
the MSCI index of Asia Pacific shares outside Japan
slid 0.5 percent.
Transport companies, whose fuel bills are headed up,
extended sharp losses from Tuesday, with Korean Air Line
shedding 1.8 percent. Chinese carrier Air China
was down 1 percent while Hong Kong's dominant carrier
Cathay Pacific fell 2.2 percent.
"The only observation an outsider sitting in Asia can make
about events in the Middle East and North Africa is that the
unpredictability of events and the difficulty in ascertaining
the 'end game' mean that equity markets settling back into
equilibrium is still some way off," said Nomura analyst Sean
Darby.
"The ongoing risk is if food prices were to continue to rise
due to unseasonal weather and indeed if fuel prices were to
climb further. Non-linear responses such as bans on exports of
food by producers or curtailment of shipments of fuel due to
non-payment would only exacerbate the situation on the ground
and make it more difficult to return to normalcy."
Gold , a traditional safe haven in times of trouble,
was little changed around $1,398 an ounce, after a six-session
rally, but the trend is still expected to be upwards.
Currencies viewed as safe havens, such as the yen and Swiss
franc, have also been boosted by events in Libya.
The euro edged higher after European Central Bank officials
stressed their readiness to fight inflation by raising interest
rates, though it was expected to face resistance near $1.3750.
The euro rose 0.3 percent to $1.3690 , having bounced
back sharply from Tuesday's intraday low of $1.3525.
Wall Street stocks on Tuesday suffered their worst day since
August in what could be the start of a long-anticipated pullback
after gaining more than 20 percent in the past six months.
The Dow Jones industrial average closed down 1.44
percent. The Standard & Poor's 500 Index fell 2.05
percent. The Nasdaq Composite Index dropped 2.74
percent.
U.S. stock futures rose 0.3 percent in Asian trade on
Wednesday, suggesting Wall Street will recover some ground later
in the day.
(Additional reporting by Francis Kan and Masayuki Kitano in
Singapore and Ian Chua in Sydney; Editing by Kim Coghill)
