* Oil gains as Libyan unrest helps push prices higher
* U.S. dollar slumps near record low against Swiss franc
* U.S. bonds rise as safe-haven allure returns (Adds oil quotes, details)
By Herbert Lash
NEW YORK, Feb 23 (Reuters) - U.S. oil prices topped $100 a barrel for the first time since October 2008 and investors sought safety in bonds, gold and the Swiss franc on Wednesday as the uprising in Libya fanned fears of inflation and slower growth.
In London, Brent crude futures climbed above $110 a barrel as the first cut in oil supplies related to the recent wave of political violence in North Africa fueled concerns in financial markets. For details see: [ID:nL3E7DN0AB]
The U.S. dollar slid just shy of an all-time low to its weakest level of the year against the Swiss franc and gold rose above $1,400 an ounce in Europe as turmoil in Libya led investors to buy safe-haven assets. [ID:nN23154207] [ID:nLDE71M0RS]
"Oil prices are not likely to fall any time soon," said Shelley Goldberg, a commodities and energy strategist at Roubini Global Economics in New York.
"We'll see higher volatility that makes it possible for WTI oil to touch highs of $110 or $115 a barrel this year," she said, referring to the U.S. oil benchmark West Texas Intermediate.
Thousands of Libyans celebrated the liberation of the eastern city of Benghazi from the rule of Muammar Gaddafi. Italy's foreign minister said as many as 1,000 people have been killed since the revolt began around a week ago. [ID:nLDE71L2LE]
Up to 25 percent of Libya's daily crude production of about 1.6 million barrels has been shut down, according to Reuters calculations, helping to pressure oil prices.
U.S. light sweet crude oil
Despite the surge to the psychological barrier of $100, the drag on the economy still might not be that great.
"Although higher oil prices at these levels would negatively impact the economy, material damage wouldn't likely occur until we moved above the $120 level," Chris Jarvis, president of Caprock Risk Management in Hampton Falls, New Hampshire.
U.S. Treasury debt briefly turned negative after an auction of $35 billion in five-year notes drew a higher yield than investors expected. [ID:nNYD003768]
The benchmark 10-year U.S. Treasury note
U.S. stocks accelerated their slide after oil prices pushed to $100 a barrel, as tech shares sank and fueled worry of a deeper market correction.
The Dow Jones industrial average <.DJI> was down 109.97 points, or 0.90 percent, at 12,102.82. The Standard & Poor's 500 Index <.SPX> was down 9.38 points, or 0.71 percent, at 1,306.06. The Nasdaq Composite Index <.IXIC> was down 37.76 points, or 1.37 percent, at 2,718.66
The MSCI world equity index <.MIWD00000PUS> was down 0.6 percent, while the pan-European FTSEurofirst 300 <.FTEU3> index of top shares closed down 1.1 percent.
Traders were focused on what top OPEC exporter Saudi Arabia will do, even after its oil minister have said the kingdom and other members of the Organization of Petroleum Exporting Countries will act should a supply shortfall develop. [ID:nLDE71M10Z]
"I don't think Libya alone will take us to $150 a barrel but if unrest spreads in the Gulf countries we could easily get there," said Edward Meir, analyst at MF Global in New York.
Copper, often a barometer of economic demand, fell to the lowest levels in nearly a month on worries inflation could slow down global economic recovery. The metal has slipped nearly 7 percent from record highs at $10,190 a tonne earlier in the month [ID:nLDE71M0ZP]
Spot gold prices
The euro