* Unrest in Oman raises concerns over Mideast Gulf output
* Libyan oil exports disrupted by uprising against Gaddafi
* Technicals see Brent crude up to $117.70 []
* Coming Up: Chicago PMI, 1445 GMT
(Updates throughout, changes dateline, pvs SINGAPORE)
By Christopher Johnson
LONDON, Feb 28 (Reuters) - Oil prices rose more than $1 per
barrel on Monday as protests in Oman fuelled wider concern about
security of supply from the Middle East after uprisings in Libya
dramatically reduced exports from North Africa.
Saudi Arabia has increased oil production to meet any
shortfall from Libya but investors are worried unrest could
spread to other big oil producers such as Kuwait or Iran.
The worst-case scenario for oil markets would be an
interruption to supply from Saudi Arabia itself. It holds most
of the world's spare crude output capacity, and no other
producer could quickly fill supply gaps.
Brent futures for April <LCOc1> rose $1.54 to $113.68 a
barrel by 0850 GMT. U.S. crude <CLc1> rose $1.10 at $98.98 a
barrel. Both benchmarks posted their highest weekly close in
two-and-a-half years last week.
"'Fear mode' is clearly where we are right now, as investors
look past Libya, and wonder whether the current unrest will
sweep eastward into the oil-rich Persian Gulf nations in more
dramatic and destabilising fashion," said Edward Meir, senior
commodity analyst at brokers MF Global.
"Dispassionate analysis would lead us to conclude that the
current surge in prices is likely overdone," Meir said, noting
that Libyan oil production was less than 2 percent of world
supply and its output was unlikely to be lost permanently.
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OMAN
Oman is the latest producer to feel the impact of the
regional unrest, although its oil flow has not been affected.
Omani oil is equivalent to about 1 percent of global oil
consumption and any disruption could be expected to have an
impact on oil prices.
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 produces around 850,000 barrels per day (bpd) and its
crude forms part of benchmark used to price more than 10 million
bpd of crude shipped from the Middle East to Asia.
The uprising in Libya has shut in as much as three-quarters
of its output of 1.6 million 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 above 9 million bpd, a senior
industry source familiar with Saudi production told Reuters last
week. Saudi Arabia pumped around 8.3 million bpd in January,
according to a Reuters survey, although some estimates were as
high as 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. []
Traders were looking ahead to manufacturing data to be
released from the United States and China on Tuesday.
(Additional reporting by Nia Williams in London and Florence
Tan in Singapore; editing by Keiron Henderson)
