* Brent crude at 29-mth high, near $120 a barrel on Libya
* Markets cannot accommodate new outages after Libya-Goldman
* World stocks, copper fall for 4th day in a row
* Gold, Treasury prices up; Swiss franc hits record high
By Dominic Lau
LONDON, Feb 24 (Reuters) - Oil prices soared more than $8.50
a barrel to hit 29-month highs near $120 on Thursday on fears
that Libya's unrest could spread to other oil-producing states
including top exporter Saudi Arabia, threatening to derail
global growth.
World stocks and copper prices fell for the fourth straight
day as investors cut their risk exposure, while safe-haven gold
and U.S. Treasury prices rose, and the Swiss franc hit a record
high against the dollar.
Muammar Gaddafi was struggling to hold onto power in Libya
as rebels extended their territory by seizing important towns
close to Tripoli. []
Goldman Sachs said oil markets were driven by fears of
unrest spreading to other producing nations and that another
disruption could create severe oil shortages and require demand
rationing.
"The market cannot accommodate another disruption, in our
view, with the problems in Libya potentially absorbing half of
OPEC's spare capacity," Goldman Sachs' Jeffrey Currie said in a
research note. []
Disruption stemming from the revolt in the world's No. 12
exporter Libya has cut at least 400,000 barrels per day (bpd) of
the country's 1.6 million bpd output, according to Reuters
calculations. []
Brent crude futures <LCOc1> rose 3.4 percent to trade above
$115 a barrel after touching a 29-month high of $119.79, while
U.S. crude futures <CLc1> advanced 3 percent to above $101 a
barrel.
The surge in oil prices is threatening to put an end to the
recovery in the developed economies and add further inflationary
pressure in booming emerging countries.
According to UBS, a $10 increase in oil price will shave off
0.3 percentage points of global growth.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
BREAKINGVIEWS-Oil threat to global growth []
Oil price, growth calculator: http://r.reuters.com/jux28r
Graphic on oil price shocks: http://r.reuters.com/qes28r
States reliant on oil graphic: http://r.reuters.com/dux28r
Banks warn of oil shortage, growth impact []
Unrest in MidEast, N. Africa: []
Analysis on impact on Libyan oil sector: []
Factbox on Libyan oil and gas: []
Interactive factbox http://link.reuters.com/puk87r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
GROWTH THREAT
"There has been another spike in oil and the general unrest
in the Middle East has knocked all the confidence out the
market," Mark Priest, senior equities trader at ETX Capital in
London, said. "We cannot see a turnaround unless suddenly the
situation is resolved in Libya."
World equities measured by MSCI All-Country World Index
<.MIWD00000PUS> dropped 0.3 percent, falling for the fourth day
in a row after hitting a 30-month high on Friday. The index is
still up 2.4 percent this year.
MSCI emerging markets index <.MSCIEF> lost 1 percent to
extend the loss for the year to 5.7 percent as investors shift
out of developing economies to developed markets on concerns
over higher inflation.
U.S. stock index futures <SPc1> <DJc1> <NDc1> fell 0.4 to
0.6 percent, indicating a weak open on Wall Street.
Europe's FTSEurofirst 300 <> index lost 0.6 percent,
while the VDAX-NEW volatility index <.V1XI>, a fear gauge, rose
6.2 percent to a two-month high. In Asia, Japan's Nikkei average
<> fell to a three-week low, down 1.2 percent.
SHELTERS SOUGHT
The dollar was down 0.7 percent at 0.9262 Swiss francs
<CHF=> after touching a record low of 0.9238 franc, and 0.8
percent weaker at 81.83 yen <JPY=>, while the euro lost 0.6
percent to 1.2752 francs <EURCHF=>.
"There is a lot of safe-haven demand for the Swiss and the
yen but the dollar's downside against these currencies could be
limited because for a lasting trend to arise you need U.S.
Treasury yields to fall," said Manuel Oliveri, currency
strategist at UBS.
Yields on benchmark 10-year U.S. Treasuries <US10YT=RR>
eased 5 basis points to 3.4330 percent, down about 34 basis
points from a nine-month high hit earlier this month.
Gold <XAU=> added 0.4 percent after gaining 0.9 percent in
the previous session, though copper <CMCU3> eased 0.3 percent
after falling 4.4 percent in the previous three sessions.
(Additional reporting by Dmitry Zhdannikov, Joanne Frearson and
Neal Armstrong in London, and Luke Pachymuthu in Singapore;
Graphics by Scott Barber and Vincent Flasseur; editing by
Stephen Nisbet)
