* Yemen tension escalates, Total warns on LNG
* Dollar slumps to 15-month low as risk appetite returns
* Analysts, oil executives see Mideast unrest spreading
* Israeli tank fire kills 4 in Gaza, Syria protests expand
(Adds details, price reaction and analyst comments)
By Joshua Schneyer
NEW YORK, March 22 (Reuters) - Oil rose on Tuesday as
unrest in Yemen threatened to further crimp energy exports from
the Gulf region and the U.S. dollar weakened to a 15-month low
on recovering risk appetite among investors.
French oil giant Total <TOTF.PA> warned buyers of liquefied
natural gas from its Yemen LNG project that shipments from the
country could face cuts due to escalating political unrest,
although they remain normal for now. []
Thousands of Yemeni protesters took to the streets on
Tuesday, clamoring for President Ali Abdullah Saleh to step
down. Several top officials have already abandoned Saleh, who
warned on Tuesday that his country would descend into civil war
if he were forced to quit. []
A bloody political standoff in Libya between the Muammar
Gaddafi regime and rebels in control of the country's east has
slashed oil production from the OPEC country by around 75
percent, to below 400,000 barrels a day (bpd). []
Yemen pumps around 290,000 bpd of oil, largely for export,
and ships 0.9 billion cubic feet per day of LNG, about 9
percent as much as top LNG exporter Qatar.
BULLISH FOR OIL
"The situation in the Middle East is still very bullish for
oil," said Phil Flynn, analyst at PFGBEST Research in Chicago.
"The unrest spreading (there) on top of the conflict in Libya
is still the market focus."
Brent crude futures <LCOK1> rose 86 cents to $115.82 a
barrel as of 12:23 p.m. EDT. U.S. crude futures for April
<CLc1> rose $1.55 a barrel to $103.88 in light volume as the
contract neared expiration on Tuesday. The more active May
contract <CLK1> traded up $1.24 a barrel to $104.33.
U.S. crude had earlier fallen as low as $101.43 after
Japan said it would release oil from its strategic stockpiles
following the recent earthquake and tsunami which forced the
idling of nuclear reactors and led to power outages.
[]
The outages should lead the Asian country, the world's No.
3 crude importer, to boost oil-fired power generation,
increasing oil demand, Goldman Sachs said on Monday.
[]
The U.S. dollar <.DXY> slumped to a 15-month low against
other major currencies as a resumption in risk appetite spurred
demand for currencies and commodities that could offer higher
returns. []
Oil inventories in top consumer the United States likely
rose for a third consecutive time last week, gaining 2 million
barrels on higher imports, according to a Reuters poll of
analysts ahead of stocks data to be released Wednesday by the
U.S. Energy Information Administration. []
Iraq's oil minister said OPEC is counting on oil prices
stabilizing around 30-month highs near $120 a barrel.
That $120 oil price range is an "acceptable" level that
would not hinder global growth, minister Abdul-Kareem Luaibi
said. []
ESCALATING UNREST
Adding to oil supply concerns were risks that unrest could
spread to bigger oil producers that have so far not faced major
upheaval, including Saudi Arabia, the world's leading oil
exporter and Yemen's northern neighbor.
"An unstable Yemen is always a headache for the Saudis and
a refugee crisis would become a significant problem," said
Samuel Ciszuk, Middle East analyst at IHS in London.
"Not the least as Islamic militants would take the chance
to blend in and enter the kingdom."
Protests also grew on Tuesday in Syria, where hundreds of
people marched in southern towns for a fifth day and the
government arrested an opposition figure. [].
Tensions also flared in Gaza, where Israeli tank fire
killed four Palestinians. []
The chief executive of U.S. independent refining company
PBF Energy, Tom O'Malley, said he expects political unrest to
spread further into major Middle Eastern oil-producing nations.
"In my opinion, no one is going to be spared," O'Malley
told a refining conference in Texas. "We might see disruptions
in the really big producing areas."
(Additional reporting by Nia Williams in London, Alejandro
Barbajosa in Singapore, Gene Ramos, Edward McAllister and
Robert Gibbons in New York; editing by Jim Marshall)
