* Crude oil prices jump on Libyan unrest, protests in region
* Tribal leader threatens to halt oil exports
* Striking workers stop production at Nafoora - Al Jazeera
(Updates prices, adds quote, detail)
By Jessica Donati
LONDON, Feb 21 (Reuters) - Clashes in oil producer Libya
sent benchmark Brent crude to 2-1/2-year highs on Monday above
$105 a barrel on fears that supplies to Western countries could
be disrupted, while U.S. prices rallied by more than $4.
Scores were killed in anti-government protests as one of the
region's bloodiest revolts hit Tripoli, while army units
defected to the opposition and long-time leader Muammar
Gaddafi's son vowed to fight to the last man standing.
[]
The leader of the Al-Zuwayya tribe in eastern Libya said oil
exports to the West would be cut off unless authorities stopped
violence against protesters. []
"Oil production in Libya could be cut off. They might be
just idle threats but that's potentially up to 1.6 million bpd,"
said Rob Montefusco, an oil trader at Sucden Financial.
U.S. crude oil <CLc1> prices were $3.99 higher at $90.19 a
barrel at 1557 GMT, while the April contract <CLc2> was $4.37
higher at $94.08.
Brent futures <LCOc1> were up $2.30 at $104.82 a barrel by
1514 GMT after breaking to a fresh 2-1/2 year high at $105.15 a
barrel.
But Brent's premium to U.S. crude oil <LCO-CL1=R> has shrunk
by more than $5 a barrel from over $16 a barrel last week
despite violence in the oil-producing region.
Libya produced 1.58 million barrels per day in January, and
major disruptions in the oil-rich North African country would
present serious strategic challenges for Western governments.
"Libya is a significant producer and exporter of good
quality crude oil, and threats by the tribal leader to stop
production is worrisome," said Christophe Barret, an oil analyst
at Credit Agricole Corporate and Investment Bank.
Italy looks set to bear the brunt of a fall-out if Libya
descends further into chaos, but oil company Eni <ENI.MI> on
Monday said output there had proceeded normally over the past 24
hours.
European oil and gas companies have evacuated staff and
suspended drilling preparations in Libya as violence spreads
across the north African country.
Wintershall, the oil and gas exploration arm of BASF
<BASF.DE> said on Monday it was winding down Libyan oil
production of as much as 100,000 barrels per day (bpd).
Other companies including Royal Dutch Shell [] and OMV
<OMVV.VI> said production was proceeding normally but they were
withdrawing expatriate staff. []
CONTAGION
A wave of popular unrest in North Africa and the Middle East
has already toppled long-time leaders in Tunisia and Egypt, and
traders are watching events carefully in other members of the
Organization of the Petroleum Exporting Countries (OPEC) for
signs of escalating tension.
"The biggest concern is current contagion spreading to Saudi
Arabia," said Michael Hewson, a market analyst at CMC Markets,
adding that "markets hate uncertainty and will act first, think
later".
Saudi Arabia, the world's biggest oil exporter, fears that
unrest in Bahrain, where majority Shi'ites are protesting
against the Sunni government, might spread to its Shi'ite
minority, who mostly live in the eastern province, the source of
Saudi oil wealth.
Bahraini protesters camped out in Manama's Pearl Square and
pressed demands for a new government on Monday. "In the eyes of
the people the government has already fallen," said Amir Ahmed,
38, a government oil sector employee.
Elsewhere, in OPEC's second-largest producer Iran, the
daughter of former president Akbar Hashemi Rafsanjani was
arrested on Sunday for taking part in a banned opposition rally,
the official IRNA news agency reported.
In Yemen, President Ali Abdullah Saleh warned protesters
demanding an end to his 32-year rule that they could not achieve
their goal through "anarchy and killing", after nationwide
unrest, which has killed 12 people since Thursday.
(Reporting by Jessica Donati; editing by Anthony Barker)
