* IMF says extended high oil prices to hit global growth
* U.S. crude stockpiles likely rose for 7th straight week
* Technicals show Brent oil to consolidate
* Coming Up: U.S. API weekly stocks, 2130 GMT
(Adds quotes, updates prices)
By Florence Tan
SINGAPORE, March 1 (Reuters) - Brent crude rose above $112 a
barrel on Tuesday as continued unrest in the Middle East and
North Africa threatened to further reduce crude supplies even as
Saudi Arabia ramped up output to cover Libyan exports.
Gains were capped as manufacturing growth in No. 2 oil
importer China slowed in February to a six-month low. In top
consumer the U.S., crude oil inventories likely increased for
the seventh consecutive week last week on higher imports.
Brent futures for April rose 60 cents to $112.40 a
barrel by 0634 GMT. The contract gained over 10 percent in
February, its biggest monthly percentage rise since May 2009.
U.S. crude rose 55 cents to $97.52 a barrel.
Both benchmarks surged to their highest in 2-1/2 years last
week as the revolt in Libya cut supply and spurred fears that
tensions could spread to other oil producers in the Middle East
and North Africa.
Demonstrators blocked roads into Oman's main oil product
port on Monday, although exports were unaffected.
"There's a very large fear premium in oil prices due to the
geopolitical situation," said Ben Le Brun, markets analyst at
CMC Markets.
"The potential is there and the risk is very high if it (the
unrest) spreads to countries such as Saudi Arabia", he said,
adding that prices could "rocket up."
Crude oil shipments from Libya are at a virtual standstill
as reduced production and bad weather hamper exports from the
world's 12th-largest producer, shipping sources said.
Bank of America Merrill Lynch said Libya's oil
infrastructure on the eastern side of the country could be prone
to attacks, "creating the risk of a prolonged output loss."
The bank added that the oil market's ability to deal with
further unrest in the Middle East was limited. Still, a Saudi
source said on Monday that the kingdom has another 3.5 million
barrels per day (bpd) of spare capacity, even after it raised
output to around 9 million bpd to meet plug the gap left by
Libya.
Libya produces 1.6 million barrels per day of mainly light
sweet crude and Saudi Arabia has said all demand for extra oil
from Libyan customers have been met.
"Saudi Arabia appears to be cranking up supplies to fill the
gap, but it is unclear at this point whether it will fully
offset the supply loss," JPMorgan analysts led by Lawrence
Eagles said in a Feb. 28 note.
CHINA MANUFACTURING SLOWS
Chinese manufacturing growth slowed in February to a
six-month low, according to an official survey, as the
government's sustained campaign to tame inflation weighed on
industrial activity.
Although China's economic growth is expected to slow
slightly this year, the world's second largest oil consumer
still has strong demand for crude and products to feed its
expansion, said Yuichiro Sakaki, a Tokyo-based trader at Mizuho
Securities.
China is targeting 7 percent per year annual economic growth
from 2011-2015, down from the average growth of 11.2 percent in
the last five year period.
Oil price spikes could cause dislocations to the world
economy, JPMorgan analysts warned.
"A steep rise in oil prices that is caused by a supply loss
is likely to be more damaging than one that is driven by robust
demand," the bank said.
Separately, the IMF warned extended higher oil prices would
hit world growth.
In the U.S., crude stocks are expected to rise 1.2 million
barrels last week while inventories for oil products are likely
to fall, a preliminary Reuters poll showed.
"While further escalation of tensions could trigger renewed
price spikes, we think oil is expensive from a fundamental
perspective," Credit Suisse analysts said in a March 1 note.
"Hence, we expect oil prices to pull back to pre-turmoil
levels once geopolitical risks subside."
(Editing by Ed Lane)
