* Africa/Mideast unrest, Iran Suez Canal intent supports
* U.S. economic data mixed, jobless claims above forecasts
* Coming up: CFTC positions data, 3:30 p.m. EST on Friday
(Updates with Brent crude settlement)
By Robert Gibbons
NEW YORK, Feb 17 (Reuters) - U.S. crude futures rose
sharply on Thursday as Egypt-style protests in oil-producing
regions kept the potential for supply disruption in focus and
traders moved to narrow the record deficit to Brent crude.
Brent crude fell from a near 2-1/2 year peak as traders
unwound spreads, narrowing Brent's premium to its U.S.
counterpart <CL-LCO1=R> to $13.75 at settlement from an earlier
$16.51 record high.
The dollar's broad decline as Middle East turmoil boosted
the appeal of other safe-haven currencies also helped support
dollar-denominated oil prices.
U.S. crude for March delivery <CLc1> rose $1.37 to settle
at $86.36 a barrel, gaining 1.6 percent, its biggest rise in
two weeks. Short-covering ahead of the contract's expiration on
Tuesday also helped to pull prices higher.
U.S. April crude <CLJ1> rose $1 to settle at $88.84.
Brent crude for April delivery <LCOc1> fell $1.19 to settle
at $102.59, retreating from a $104.30 peak. Wednesday's Brent
close was the highest since September 2008, as was the intraday
peak of $104.52.
"It looks like there are more fears about unrest going on
in the Middle East with the issues about Iran trying to put
warships into the Suez canal," said Mike Zarembski, senior
commodities analysts for optionsXpress in Chicago.
"Brent is actually a bit weaker here and it looks like
there may be a bit of squaring off of that position and a bit
of profit taking for those lucky enough to be long Brent and
short WTI."
A Reuters poll of analysts and banks on Thursday forecast
that Brent prices would drop later this year as the risk
premium from unrest in the Middle East ebbs.
"The current price is unsustainable," said Carsten Fritsch,
commodity analyst at Commerzbank in Frankfurt. "Tension in the
Middle East should calm down at some point, whereas (North Sea)
output should normalize."
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
POLL-Oil price to fall []
Interactive graphic on Middle East unrest:
http://r.reuters.com/nym77r
Graphic of asset returns in 2011:
http://r.reuters.com/suc97r
Reuters Insider news bulletin on Reuters oil price poll:
http://link.reuters.com/xet97r
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Clashes with protesters in Bahrain, Libya and Yemen kept
investors on edge. [] []
[]
Tensions between Israel and Iran remained a factor amid
uncertainty about Iran's plans to send navy ships through the
Suez Canal, after Israel's foreign minister called the
intention provocative and markets were rattled on Wednesday.
Iranian state TV said on Thursday that two Iranian warships
were due to pass through the Suez Canal, the first such passage
by the Islamic Republic's navy since Iran's 1979 revolution.
[]
But Suez Canal officials said they had no notification so
far that the Egyptian government would allow the two Iranian
naval ships to cross the waterway. []
Tensions about navy ships in the canal came as Iran planned
to prosecute opposition leaders for protests. []
U.S. economic data was mixed and did not provide
directional momentum for oil prices, brokers and analysts said.
January core consumer prices rose at their quickest pace in
more than a year and above expectations. []
Separate reports showed U.S. initial jobless benefit claims
rose more than expected, while the Philadelphia Federal Reserve
Bank said its business activity index rose in February to its
highest reading since January 2004.
The dollar index <.DXY> weakened as the Swiss franc
benefited from safe-haven appeal and the euro gained after
solid a Spanish debt auction. []
A weak dollar usually lifts dollar-denominated oil prices
because it lowers the cost to consumers using other currencies
and also the value of greenbacks paid to producers.
U.S. stocks edged up as investors bought on early dips,
keeping indexes near multi-year highs, despite the rises in
both inflation and weekly jobless claims. []
(Additional reporting by Gene Ramos and Matthew Robinson in
New York, Anna Yukhananov and Christopher Johnson in London and
Jennifer Tan in Singapore; Editing by Lisa Shumaker)
