UPDATE 10-Oil surges as Libya clashes intensify

                                
 * Libyan security forces fire shots at Tripoli protesters
                                
 * Rebels clash with Gaddafi forces at key oil terminal
                                
 * Coming up: CFTC positions data, 3:30 p.m. EST Friday
 (Updates prices and market activity, adds detail)
                                
 By Robert Gibbons
                                
 NEW YORK, March 4 (Reuters) - U.S. crude prices jumped to
their highest since September 2008 on Friday and Brent rose
above $116 a barrel as Libyan security forces cracked down on
protesters in Tripoli and clashed with rebels near the major
oil terminal of Ras Lanuf.
                                
 Investors watched for extended supply disruptions, weighing
the threat that Libya's key oil sector could get embroiled in
the revolt, as well as the possibility that spreading protests
and unrest could affect other producers in the region,
especially top OPEC exporter Saudi Arabia.
                                
 Protests in Yemen, Oman and Bahrain have all helped fuel
uncertainty about the region after protests toppled regimes in
Egypt and Tunisia.
                                
 U.S. crude futures for April delivery <CLc1> rose $2.18
cents to $104.09 a barrel at 12:34 p.m. EST (1734 GMT), after
hitting $104.32, the highest since front-month crude hit
$106.91 on Sept. 29, 2008.
                                
 "There has ... been a series of rising highs and rising
lows, indicating the market maintains a considerable degree of
inherent strength," Michael Fitzpatrick, editor of the Kilduff
Group industry newsletter in New York, said in a note.
                                
 "Prices are well beyond the moving averages so there is an
active buy signal," he noted.
                                
 U.S. crude prices were well above the $81.96 200-day moving
average and also the $90.81 50-day and $97.72 10-day moving
averages, according to Reuters data.
                                
 Brent crude futures for April delivery <LCOc1> rose $1.39
to $116.18 a barrel, having reached a high of $116.49.
                                
 Brent's premium to its U.S. counterpart <CL-LCO1=R> was
just above $12 a barrel, down about 77 cents from the previous
session and well below last week's record $16.91.
                                
 Brent's price rise has been stronger because Europe and the
Brent market is seen as more vulnerable to supply disruptions
from Libya and the region.
                                
 "Tension in the Middle East is like a runaway train," said
Michael Hewson, an analyst at CMC Markets in London. "Once it
starts, it's very difficult to stop. And if there is a danger
that it impacts the supply chain, people will understandably
get nervous."
                                
 Libyan leader Muammar Gaddafi's forces battled rebels on
several fronts in a worsening of the country's crisis and
unrest erupted in the capital when gunmen fired to break up
crowds shouting "Gaddafi is the enemy of God." [ID:nLDE72300M]
                                
 Rebels fought forces loyal to Gaddafi on the outskirts of
the key oil terminal of Ras Lanuf as the head of Libya's rebel
council vowed "victory or death." [ID:nLDE7230HF]
                                
 Al Jazeera television also reported that an oil facility at
Zueitina, south of Benghazi was damaged and on fire.
[ID:nLDE7231HJ]
                                
 The International Energy Agency said that one million
barrels per day (bpd) of Libya's oil output was currently shut,
lifting its estimate to the higher end of the bracket it gave
on Wednesday when it pegged shut output at between 850,000 bpd
and 1 million bpd. [ID:nWEB3662]
                                
 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
                                
 Reuters Insider show on Libyan oil company head interview:
                                
 http://link.reuters.com/jys38r
                                
 Graphics showing:
                                
 Middle East unrest             http://r.reuters.com/nym77r
                                
 Oil price shocks               http://r.reuters.com/qes28r
                                
 Countries most reliant on oil  http://r.reuters.com/dux28r
                                
 Brent and WTI open interest    http://bit.ly/iemiLr
                                
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
                                
 In Saudi Arabia's neighboring Yemen, President Ali Abdullah
Saleh rejected an opposition plan for him to transfer power
this year, as demonstrations swelled into hundreds of
thousands. [ID:nLDE7230NU]
                                
 U.S. FEB JOBS GAIN OVERSHADOWED
                                
 Libya's turmoil and the regional unrest pushed the closely
watched U.S. monthly employment report to the background.
                                
 U.S. non-farm payrolls rose in February, hitting a
nine-month high, and the jobless rate slipped to a nearly
two-year low of 8.9 percent. [ID:nOAT004757]
                                
 But U.S. stocks fell as rising crude prices weighed on
equities after Wall Street posted its best one-day rise in
three months on expectations February's payrolls would grow
more than they did. [ID:nN04173491]
 (Additional reporting by Gene Ramos in New York, Claire
Milhench in London and Florence Tan in Singapore; Editing by
Marguerita Choy)