Crude climbs above $105 on Libya, Mideast woes

* Libya conflict rages, keeps crude oil prices up

 * Prices off highs on rumors of Gaddafi exit deal

 * U.S. weighs release from strategic oil reserves

 * Coming up: API oil data, 4:30 p.m. EST, Tuesday

 NEW YORK, March 7 (Reuters) - U.S. crude oil futures ended
nearly 1 percent higher to hit their highest levels since
September 2008 as raging violence in Libya spawned further worries
about supply disruptions.

 Fears persisted that similar uprisings could hit other oil
producers in the Middle East and North Africa, further raising
geopolitical risks.

 April crude CLJ1 settled well off highs near $107 a barrel,
however, as rumors spread that Muammar Gaddafi was seeking an exit
deal.

 Traders next focus on weekly U.S. inventory reports. A Reuters
poll forecast that domestic crude stocks rose 300,000 barrels,
while distillates and gasoline fell 900,000 barrels and 1.3
million barrels, respectively. [EIA/S]

 FUNDAMENTALS

 * On the New York Mercantile Exchange, April crude CLJ1
settled up $1.02, or 0.98 percent, at $105.44 a barrel, the
highest since the Sept. 26, 2008, close at $106.98. It traded from
$104.25 to $106.95.

 * U.S. crude's discount against Brent narrowed to $9.60, from
$11.55 at the close Friday. April Brent LCOJ1 settled at
$115.04, down on rumors about Gaddafi's exit deal. [CL-LCO=R]

 * Britain and some other countries are working on a U.N.
Security Council resolution allowing for a no-fly zone over Libya,
British Foreign Secretary William Hague said. [ID:nNLDE72620E]
[ID:nNlDE7260G5]

 * Gulf Arab states called for a no-fly zone imposed in Libya
and for an urgent Arab League meeting to discuss the Libyan
situation, a statement from the Gulf Cooperation Council said.
[ID:nLDE72625E]

 * The White House pushed back against pressure from some
lawmakers for direct intervention in Libya, saying it first wanted
to figure out what various military options could achieve.
[ID:n0781461]

 * NATO launched 24-hour surveillance of Libya with AWACS
reconnaissance planes as the military alliance plans potential
steps to address Libya's violent unrest. [ID:n07107760]

 * The U.S. government is considering tapping its strategic oil
reserves to safeguard economic growth, White House Chief of Staff
William Daley told NBC's "Meet the Press" on Sunday, echoing
comments by some Obama officials. [ID:nN06273383]

 * OPEC ministers are holding informal consultations about oil
prices and Libya, but the group is not planning to hold an
emergency meeting, an OPEC delegate said. [ID:nLDE7260TT]

 * Citigroup raised its price forecasts for Brent and U.S.
crude for 2011 and 2012, citing a stronger-than-expected first
quarter and a "fear premium" on threats of continued output
disruptions. [ID:nL3E7E70MN]

 * Commerzbank raised its second-quarter forecast for Brent
LCOc1 crude to $120 a barrel, from $93. [ID:nL3E7E70T9]

 * Morgan Stanley (MS.N) has stopped trading crude and refined
products with Libya to comply with U.S. sanctions against the
Gaddafi government.[ID:nLDE7261B6]

 MARKETS NEWS

 * U.S. gold futures ended off a record high as oil prices
pulled back from early highs on speculation Gaddafi was seeking a
deal to leave the country. [ID:n07566740]

 * Copper suffered its biggest one-day loss in nearly four
months as rising oil prices and geopolitical instability fanned
recovery doubts. [MET/L] [ID:nLDE72610M]

 * Wall Street ended lower in a technology shares sell-off
while uncertainty spawned by higher oil prices looked set to fuel
further volatility in the days ahead. [.N]

 * The euro's rally against the dollar halted as sovereign debt
worries returned, but oil prices and expectations for higher euro
zone interest rates were seen continuing to favor the currency.
[USD/] .DXY

 UPCOMING DATA/EVENTS

 * U.S. Energy Information Administration weekly petroleum
inventory data, 10:30 a.m. EST (1530 GMT), Wednesday.

    SETTLE     NET    PCT     LOW    HIGH  CURRENT  DAY AGO

              CHNG   CHNG                      VOL      VOL
CLc1   105.44    1.02   1.0%  104.25  106.95  369,957  369,148
CLc2   106.73    1.12   1.1%  105.46  108.25  140,696  127,363
LCOc1  115.04   -0.93  -0.8%  114.50  118.50  196,140  167,586
RBc1   3.0039 -0.0425  -1.4%  2.9988  3.0936   34,584   34,950
RBc2   3.0119 -0.0406  -1.3%  3.0065  3.0950   22,493   16,996
HOc1   3.0657 -0.0236  -0.8%  3.0467  3.1372   39,748   51,620
HOc2   3.0743 -0.0214  -0.7%  3.0561  3.1426   19,529   19,514
TOTAL MARKET            VOLUME                 OPEN  INTEREST

          CURRENT    Mar 04   30D AVG     Mar 04  NET CHNG
CRUDE        818,485   865,400   928,926  1,568,095    -7,498
RBOB          86,185    78,922   116,733    277,160      -293
HO            95,742   128,562   135,042    307,984       702
 (Reporting by Gene Ramos and Robert Gibbons)
(Source: http://www.reuters.com/article/2011/03/07/markets-energy-nymex-idUSN0711784320110307)