UPDATE 3-Brent heads for biggest qtrly gain in almost 2 yrs

                                
 * Brent headed for 22 pct qtrly gain, biggest since Q2 2009
                                
 * Coming Up: U.S. weekly initial jobless claims; 1230 GMT
                                
 
                                
 (Changes dateline, updates throughout)
                                
 By Jessica Donati
                                
 LONDON, March 31 (Reuters) - Brent crude rose over $1 on
Thursday to $116.35 a barrel, heading for its biggest quarterly
gain in almost 2 years, as Middle East supply worries led
concerns.
                                
 Traders, analysts and investors see a new floor for prices
around $100 a barrel, supported by supply risks and expanding
economies after the most turbulent and volatile quarter for the
oil market since the end of 2008.
                                
 Brent crude for May <LCOc1> advanced 65 cents on Thursday to
$115.78 barrel at 0941 GMT, less than $4 from a 2-1/2-year high
near $120 on Feb. 24. Brent fell below $108 in the aftermath of
Japan's earthquake.
                                
 U.S. crude <CLc1> climbed 71 cents to $104.98.
                                
 In Syria, where more than 60 people have already been killed
in protests, President Bashar al-Assad defied calls to lift a
decades-old emergency law as hundreds chanting "freedom" marched
in the port city of Latakia on Wednesday. [ID:nLDE72T006]
                                
 "Friday prayers may be a key issue supporting the market
now, and some of the focus is starting to shift back to Japan
and the cost of rebuilding the country," said Thorbjoern Bak
Jensen. an analyst at Global Risk Management.
                                
 Japan's oil product sales rose 0.8 percent in February from
a year earlier as improvement in the economy helped boost
gasoline demand for a fourth straight month, although the
outlook for consumption in the aftermath of the earthquake
remained uncertain. [ID:nL3E7EV0KK]
                                
Lost nuclear power and reconstruction efforts could boost
Japanese demand for oil to generate electricity. The
International Energy Agency has said an additional 200,000
barrels per day will be needed to fill in after Japan's nuclear
disaster. But traders say the impact on world supply could be
higher. [ID:nLDE72H0E6]
                                
"The nuclear issue in Japan could have quite significant
consequences. A lot of countries are now debating nuclear and
new building is on hold," a gasoil trader said.
                                
 
                                
 WAR IN LIBYA
                                
 The prospect of a protracted civil war in Libya remained as
forces loyal to Libyan leader Muammar Gaddafi regained key oil
ports at Ras Lanuf and Brega in a counter-attack on Wednesday,
highlighting the vulnerability of rebel forces in the absence of
Western air strikes. [ID:nLDE72T0HB]
                                
  Gaddafi's regime took a hit after the country's foreign
minister defected in protest against attacks on civilians and
flew to Britain. [ID:nLDE72T2BO]
                                
  U.S. President Barack Obama has signed a secret order
authorising covert U.S. government support for rebel forces
seeking to oust Gaddafi, government officials told Reuters on
Wednesday. [ID:nN30179454]
                                
 The United States is part of a coalition, with NATO members
and some Arab states, which is conducting air strikes on Libyan
government forces under a U.N. mandate aimed at protecting
civilians opposing Gaddafi.
                                
 
 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
 More on Middle East unrest:       [nTOPMEAST]  [nLDE71O2CH]
 Libya Graphics http: //link.reuters.com/neg68r
 Interactive graphic http://link.reuters.com/puk87r
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
                                
 Libyan oil shipments remain at a standstill, with no one
attempting to hire tankers due to violence and the impact of
sanctions, shipping sources said on Wednesday. [ID:nLDE72T21W]
                                

                                
 GLOBAL RECOVERY
                                
 U.S. private employers added more than 200,000 jobs in
March, a report showed on Wednesday, ahead of government data on
March non-farm payrolls due on Friday. [ID:nN30116504] 
                                
 Weekly U.S. initial jobless claims due at 1230 GMT for the
week ending March 26 are likely to drop to their lowest in four
weeks and the second lowest since July 2008, according to IFR
Markets, a Thomson Reuters news and market analysis service.
                                
 "The second quarter is a good period, and oil demand should
be increasing," said Tetsu Emori, a Tokyo-based commodities fund
manager at Astmax Investments, adding that he expected U.S.
crude to end the year close to $120.
                                
 "The world economy should be quite positive, especially
after mid-May, and the downside for crude should be quite
limited because of the geopolitical risk of disruption to supply
in the Middle East and North Africa."
  (Reporting by Jessica Donati; editing by Jason Neely)