* World's oil supply to tighten if unrest spreads in MidEast
* Technicals show Brent crude to rise to $117.70
* Coming Up: Chicago PMI, 1445 GMT
(Updates prices)
By Florence Tan
SINGAPORE, Feb 28 (Reuters) - Brent crude rose on Monday,
crossing $114 a barrel, as protests in Oman fueled concern about
security of supply from the Middle East and North Africa even as
top exporter Saudi Arabia pumps more.
Oman is the latest producer to feel the impact of the
regional unrest, although its oil flow has not been affected.
Revolt in Libya has cut as much as three quarters of the
OPEC-member's output, prompting Saudi Arabia to step in and plug
the supply gap to Libya's oil buyers.
Brent crude rose by $1.63 to $113.77 a barrel by
0747 GMT. U.S. crude rose $1.59 at $99.47 a barrel. Both
benchmarks posted their highest weekly close in 2-1/2 years last
week.
"There is the continued threat that conflicts will spread in
the region that produces a large amount of oil in the world,"
said Ben Westmore, a commodities economist at the National
Australia Bank.
"There's been a bit of a contagion already," he said.
The worst-case scenario for oil markets would be an
interruption to supply from Saudi Arabia. It holds most of the
world's spare crude output capacity, and without it there is no
producer that could fill supply disruption such as that stemming
from Libya.
The impact on oil supply would also be severe if conflict
were to spread to big suppliers such as Iran and Kuwait,
Westmore said.
OMAN
Protesters blocked roads into the industrial area of Oman's
refined product export port Sohar on Monday. Product shipments
continued unhindered, a port spokeswoman said.
Oman is a small oil producer pumping around 850,000 barrels
per day, but its crude forms part of benchmark pricing for more
than 10 million barrels per day (bpd) of crude shipped from the
Middle East to Asia. Oman exports crude through the port at Mina
al-Fahal.
Oman accounts for about 1 percent of the global oil
consumption and any disruption would have an impact on oil
prices, Westmore said.
"In terms of those countries who directly import from Oman,
I think they can source oil from elsewhere," he said.
LIBYA
Violent revolt in Libya has shut down as much as
three-quarters of its output of around 1.6 million barrels a day
(bpd), according to some estimates.
State oil giant Saudi Aramco has met all demand for extra
supplies from Libya, Chief Executive Khalid al-Falih said on
Monday.
The kingdom has boosted output to a level exceeding 9
million bpd, a senior industry source familiar with Saudi
production told Reuters.
Saudi Arabia pumped around 8.3 million bpd in January,
according to a Reuters survey, although some estimates are
higher and one consultant pegged output last month 8.9 million
bpd.
Iran's Oil Minister urged Saudi Arabia on Sunday to refrain
from taking a hasty decision on increasing its oil production
after the popular uprising in Libya, the official IRNA news
agency reported.
Still, Iran is also selling more crude to refiners looking
for alternatives to Libyan supplies.
PRICES
JPMorgan increased late on Friday its 2011 Brent oil
forecast to $108 a barrel, up from the previous $95, on tighter
supply after Libyan output losses.
It also raised its 2011 average forecast for WTI crude by
3.2 percent to $96 a barrel.
"The new 2011 price forecast maps a projected outcome within
a range of scenarios that could encompass the oil market over
the next 12 months - ranging from a rapid normalization of
geopolitical risk to the loss of output in a major oil
producer," JPMorgan said in a report on Friday.
Traders were looking ahead to manufacturing data to be
released from the United States and China on Tuesday, Westmore
said.
(Editing by Ed Lane)
