* Concerns about demand for Japan, Europe weigh on oil
* Mideast turmoil, Libya conflict supportive to oil
* J.P. Morgan raises 2011 oil price forecasts
* U.S. Feb pending home sales, 10 a.m. EDT Monday
(Recasts, updates with settlement prices and adds detail)
By Robert Gibbons
NEW YORK, March 25 (Reuters) - Oil prices edged lower in
light profit-taking on Friday, but ended higher on the week, as
supply threats from the Middle East and Libya and the ongoing
crisis in Japan sidelined many players.
Protests in Yemen, Syria, Bahrain and by Shi'ites in Saudi
Arabia kept concerns about unrest and the threat to oil supply
from region in focus, as traders braced for a long-term
disruption of supplies from Libya. []
[] [] []
But the uncertainty about the impact on oil demand of the
crisis in Japan, where radiation fears escalated, have added to
market concerns, pushing trading volumes for the week to the
lowest level since the end of 2010. []
[]
Brent crude futures for May delivery <LCOc1> fell 13 cents
to settle at $115.59 a barrel, having seesawed between $115.20
and $116.13. Brent managed to end 0.6 percent higher for the
week, a second straight weekly gain.
U.S. May crude futures <CLc1> fell 20 cents to settle at
$105.40 a barrel, swinging between $104.50 and $105.95. For the
week, front-month U.S. futures gained 4.28 percent, the best
percentage rise since the week to March 4.
Data from the Commodity Futures Trading Commission showed
speculators increased their bullish bets in the week to
Tuesday, hiking their net-long positions in U.S. crude oil
futures and options in the week to Tuesday although overall
open interest was down. []
"We've had a good run this week and for today, we are
seeing some pre-weekend profit-taking. While there is a lot of
turmoil in the Middle East, none of the ongoing unrest affects
big oil producers," said Ed Meir, senior commodities analyst at
MF Global in New York.
"And on balance we are not short of physical supply.
Libya's outage due to the fighting there has been offset by
Saudi production and the demand in Japan is down. So there's no
real tightness in supply at the moment."
SPREAD NARROWS
Brent's premium to the U.S. benchmark West Texas
Intermediate crude <CL-LCO1=R> dipped slightly, down 5 cents at
$10.29 a barrel late in the day but off more than $1.50 for the
week as traders took profits on the spread.
Despite U.S. crude gains for the week, it stalled short of
2011 peaks, failing to breach the March 7 high of $106.95
reached on March 7.
Total U.S. crude trading volume, at just over 392,000 lots
traded, was 53 percent below the 30-day average. Brent trading
volume also remained anemic at just above 238,000 lots.
The weekly U.S. trading volume, at about 2.49 million lots
with 1-1/2 hours of post-settlement trading left on Friday, was
on track to be the lowest since the 1.379 million lots were
traded in the week to Dec. 31, 2010.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic on U.S. failure to beat 2011 peak:
http://r.reuters.com/wyd78r
More on Middle East unrest: [] []
Libya Graphics http://link.reuters.com/neg68r
Interactive graphic http://link.reuters.com/puk87r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
EYES ON UNREST
Rebel forces and those loyal to Libyan leader Muammar
Gaddafi clashed as Western warplanes struck at armor used by
the government to crush the revolt. []
With an expected summer driving demand boost and continuing
supply uncertainty, J.P. Morgan analysts headed by Lawrence
Eagles raised oil price forecasts for 2011 for Brent and U.S.
crude. []
"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
in a research note.
Analysts polled by Reuters this week forecast oil prices
will hold over $100 a barrel through 2013, due to tensions in
the Middle East, with average forecasts for 2011 raised by $12
to over $104 a barrel. []
(Additional reporting by Gene Ramos in New York, Christopher
Johnson in London and Alejandro Barbajosa in Singapore; Editing
by Marguerita Choy)
