Oil in advance again on Bahrain and Japanese nuclear crisis (Reuters) (16-03-2011)

LONDON – Brent crude advanced as much as $2 to over $110.50 a barrel on Wednesday, rebounding from a three-week low near the start of the session as tensions in the Middle East continued and the Japanese nuclear crisis worsened.

Bahraini security forces cracked down on protesters on Wednesday, firing teargas they cleared demonstrators from a central roundabout that had become the symbol of an uprising by the island's Shi'ite Muslim majority.

Brent for April was up $1.62 to $110.14 a barrel by 0905 GMT (5:05 a.m. ET), after a three-week low of $107.35.

U.S. crude futures were up $1.23 at $98.41 a barrel around the same time.

Oil prices are estimated to benefit more from an expected increase in Japanese demand for gasoil and fuel oil for power generation to replace some of the nuclear capacity lost following Friday's earthquake and tsunami.

According to the American Petroleum Institute, U.S. crude oil futures were supported earlier in the day by a smaller-than-expected 91,000 barrel stockbuild at the Cushing storage hub while a U.S. Energy Information Administration report due at 1430 GMT on Wednesday is forecast to show higher crude inventories on increased imports.

Gasoline stocks are expected to fall 1.8 million barrels. Distillate supplies (which include heating oil and diesel) are expected to have dropped 1.3 million barrels according to the poll.

Libya's oil output, normally about 1.6 million barrels per day and down by at least two-thirds, will take some time to return to normal, the head of the National Oil Corporation said on Tuesday, as some installations have been damaged in fighting between rebel and government forces.

Source: Reuters