* Citigroup, Commerzbank raise oil price forecasts
* OPEC talking informally, sees no need to meet - delegate
* U.S. considers tapping emergency stocks to lower prices
(Updates prices)
By Alex Lawler
LONDON, March 7 (Reuters) - Brent crude rose to $118 a
barrel and U.S. oil hit the highest since September 2008 on
Monday as fighting in Libya disrupted its supplies and renewed
concern of wider disruptions in the Middle East.
While the Libyan crisis has cut supply from a country that
normally provides almost 2 percent of world output, the prospect
of unrest spreading to larger producers such as Saudi Arabia is
a far more bullish scenario for oil markets.
"The major risk remains the prospect of the political unrest
spreading to the Gulf producing region," said Caroline Bain,
economist at the Economist Intelligence Unit. "However, even if
there is civil unrest in Saudi Arabia, it is not a given that
oil production will be affected."
Brent crude <LCOc1> gained $1.60 to $117.57 at 1345 GMT.
U.S. crude <CLc1> was up $2.29 at $106.71, having earlier risen
as high as $106.95, the highest since September 2008.
In Saudi Arabia, security forces have detained at least 22
minority Shi'ites who protested last week against
discrimination, activists said on Sunday, as the kingdom tried
to keep the wave of Arab unrest outside its borders.
[]
Citigroup and Commerzbank raised their oil price forecasts
on Monday and the latter is now looking for a Brent price of
$120 in the second quarter, citing the risk that disruption
could spread in the Middle East.
RISK PREMIUM HIGH
Brent's highest this year is $119.79 reached on Feb. 24. The
European benchmark crude traded as high as $118.50 on Monday.
"Not only actual production losses but above all the threat
of contagion spreading to neighbouring regions will keep the
geopolitical risk premium at a high level for the time being,"
Commerzbank said in a report.
The rally in prices has prompted the Obama administration to
consider releasing emergency oil stockpiles as policymakers seek
ways to contain a negative spillover to the world's biggest
economy. []
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For a FACTBOX on emergency oil stockpiles: []
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
OECD commercial oil stocks http://link.reuters.com/qyg48r
Brent and WTI open interest http://r.reuters.com/cag48r
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There has so far been no formal response from the
Organization of the Petroleum Exporting Countries, which has
brushed off the need to meet before a scheduled gathering in
June.
OPEC ministers are holding informal consultations, but the
group is not planning to hold an emergency meeting, an OPEC
delegate said on Monday. []
Libya, an OPEC member, usually produces 1.6 million barrels
per day and its output has been cut by as much as 1 million bpd,
according to the International Energy Agency.
(Additional reporting by Alejandro Barbajosa in Singapore and
Karolin Schaps in London; editing by James Jukwey)
