UPDATE 10-Oil plunges $4 as Iraq restores output

                                
 (Adds poll of analysts for U.S. inventory data)
                                
 By Matthew Robinson
                                
 NEW YORK, March 31 (Reuters) - Oil prices plunged $4 to
below $102 a barrel on Monday as a week of heavy fighting in
Iraq's oil port city of Basra ended and officials predicted a
recovery in crude exports from the hub within a day.
                                
 U.S. crude <CLc1> settled down $4.04 at $101.58 a barrel
after trading as low as $100.25, extending losses from Friday.
London Brent crude <LCOc1> fell $3.47 to $100.30 a barrel.
                                
 "There has been some extraction of the geopolitical risk
premium because of the easing of military action in southern
Iraq, and the exports are likely to be back on track tomorrow,"
said analyst Jim Ritterbusch, president of Ritterbusch &
Associates.
                                
 The attack on the pipeline marked the first disruption of
exports from southern Iraq since 2004.
                                
 Iraqi officials said operations on a pipeline feeding
Basra's export terminal would recover by Tuesday, after a bomb
attack during an Iraqi military crackdown on Shi'ite militants
in the area cut exports by about 100,000 barrels per day.
[nL31586100]
                                
 Shi'ite cleric Moqtada al-Sadr called his Mehdi fighters
off the streets Sunday to end a week of bloodshed, easing fears
of further damage to oil infrastructure in the region.
[ID:nL31425442]
                                
 The losses extended a pullback in oil prices from a record
earlier in March of $111.80 a barrel, and came alongside
selling across many commodities as investors reaped profits
from a string of record highs after pouring cash into the asset
class to hedge against inflation.
                                
 "There's broad-based selling across the commodities
spectrum as some of the funds book some last-minute profits on
the last day of the quarter," Ritterbusch said.
                                
 Worries that the credit crisis and the wider economic
problems of the United States could drag down demand growth
have also weighed on prices. U.S. oil demand over the past four
weeks has averaged 2.2 percent below a year ago, according to
the most recent government data.
                                
 Oil's losses came as U.S. stocks gained on cautious
optimism regarding a White House plan to boost the Federal
Reserve's role in overseeing financial institutions.
[nN31408440]
                                
 Traders were also eyeing potential supply disruptions from
Africa, after oil workers from OPEC member Nigeria on Friday
threatened strike action over a dispute with ExxonMobil
<XOM.N>. [nL28854256]
                                
 Oil workers in Gabon also threatened to extend a strike
that already has shut in around 90,000 bpd of the nation's
total output of around 270,000 bpd. [nL31715205]
                                
 A Reuters poll of analysts forecast weekly U.S. government
data due Wednesday will show an increase of 2.3 million barrels
in crude inventories in the week to March 28. [API/S]
                                
 Analysts expect a drop of 1.5 million barrels in distillate
stocks, and a decline of 2.3 million barrels in gasoline
supplies, as refiners cut runs due to poor margins.
 (Additional reporting by Jane Merriman in London; Fayen Wong
in Perth; Editing by Walter Bagley)