UPDATE 7-Brent up near $114 as Libyan fighting intensifies

                                
 * OPEC says no plans for emergency meeting
                                
 * Libyan refinery shut, oil town suffers airstrike
                                
 * Coming Up: U.S. EIA weekly inventory report at 1530 GMT

                                
 (Updates prices, adds no-fly zone comments, airstrike)
                                
 By Claire Milhench
                                
 LONDON, March 9 (Reuters) - Oil rose over $1 on Wednesday as
fighting intensified in Libya, and an OPEC delegate said it saw
no need to hold an emergency meeting to ease supply fears. 
                                
 Brent crude oil futures for April <LCOc1> were up 94 cents
to $114 a barrel at 1320 GMT as Libyan forces loyal to Muammar
Gaddafi closed in on rebels in the western city of Zawiyah
[ID:nLDE728029] and an area around Es Sider oil terminal was hit
by an air strike. [ID:nWEA7545]
                                
 Brent had earlier pushed to an intraday high of $114.39
following news that the heavy fighting had forced the shut down
of the Zawiyah refinery [ID:nLDE7280SI]. 
                                
 Christopher Bellew, an oil trader at Bache Commodities in
London, said the perception of prolonged trouble in Libya was
driving the rally in oil prices. 
                                
 "As the outlook for Western intervention looks less likely
-- which would bring things to a quick conclusion -- then we are
looking at a prolonged struggle," he said. 
                                
 "Gaddafi might defeat his opponents gradually, or his
opponents might end up going underground, fighting a guerilla
campaign which might involve them blowing up pipelines to try to
hurt Gaddafi economically," he said.
                                
 Barclays Capital analyst Paul Horsnell was also sceptical
about a swift return of Libyan oil to the market, even if the
current government gets the upper hand. "We would expect Libyan
oil to face a difficult and perhaps prolonged re-entry to the
world market," he said in a note. 
                                
 The market was also supported by comments from an OPEC
delegate that the group saw no need at present to hold an
emergency meeting to discuss raising its oil output
[ID:nLDE7280UW].
                                
 Leading OPEC producer Saudi Arabia is already pumping more
oil -- up to 9 million barrels per day (bpd). [ID:nN08108833]
                                
 "It's a fear trade," said Michael Hewson, an analyst at CMC
Markets. "It's about the fear of these troubles escalating --
there is some concern about how the Saudi Day of Rage will go on
Friday." [ID:nLDE7260Y3]
                                
 He said that supply was not necessarily the issue, it was
more the perception that if unrest in the Middle East spread, it
could affect Saudi Arabia, or its ability to raise supply if the
need arises. 
                                
 The Saudi Foreign Minister Prince Saud Al-Faisal, speaking
at a news conference on Wednesday, said Muslim clerics had
banned demonstrations in Saudi and that dialogue was the best
way to achieve what Saudis wanted. [ID:nLDE7280VW]
                                
 U.S. crude <CLc1> was up 18 cents at $105.20 after earlier
reaching an intraday high of $105.38.
                                
 
                                
 NO-FLY ZONE
                                
 World powers are still considering imposing a no-fly zone
over the Libya, with UK Prime Minister David Cameron seeking
international support for any measures to be taken
[ID:nHOC002220].
                                
 In a statement, the exiled Libyan Crown Prince Mohammed El
Senussi asked for a no-fly zone over Libya and strikes against
Libyan leader Muammar Gaddafi's air defences but did not support
foreign troops on the ground. [ID:nLDE7281DE]
                                
 Speaking ealier in the day, Gaddafi said that "the Libyan
people" would take up arms against Western powers if they tried
to enforce a no-fly zone [ID:nLDE7280R3].
                                
 The Pentagon said that the United States was still looking
at a range of military options on Libya [ID:nL3E7E90YK]. Libyan
oil trade has been virtually paralysed as banks decline to clear
payments in dollars due to U.S. sanctions [ID:nLDE7271YJ].
                                
    
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
                                
 FACTBOX on emergency oil stockpiles:       [ID:nL3E7E40BY]
                                
 Graphics on U.S. strategic oil reserve, U.S. and other IEA
                                
 nations' reserves:          http://link.reuters.com/cah48r
                                
 Graphics showing:
                                
 Middle East unrest             http://r.reuters.com/nym77r
                                
 Oil price shocks               http://r.reuters.com/qes28r
                                
 Those most reliant on oil      http://r.reuters.com/dux28r
                                
 OECD commercial oil stocks  http://link.reuters.com/qyg48r
                                
 Brent and WTI open interest    http://r.reuters.com/cag48r
                                
 Graphic of U.S. oil stocks:    http://r.reuters.com/sup48r
                                
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
                                
 U.S. crude inventories climbed a larger-than-expected 3.8
million barrels in the week to March 4, the American Petroleum
Institute (API) said on Tuesday, ahead of EIA statistics due on
Wednesday at 1530 GMT. 
                                
 Saudi Basic Industries Corp (SABIC) <2010.SE> said that
growth in demand for petrochemicals this year should match 2010
levels, led by Asia and the Middle East, despite higher oil
prices. [ID:nLDE72723I]
  (Additional reporting by Alejandro Barbajosa, editing by
William Hardy)