PERTH, April 7 (Reuters) - U.S. crude oil futures inched lower Thursday after ending at their highest level in 2-1/2 years in New York on Wednesday, but supply worries due to the turmoil in Libya and the Middle East continued to support prices.
In volatile trading, Brent May crude settled at the highest perch since August 2008, while U.S. crude for May delivery settled at its highest level since September 2008.
"The markets are still focused on expectations of Middle Eastern concerns and that premium has continued to be marked into the market," Jonathan Barratt, managing director of Commodity Broking Services in Sydney, said.
"It's expectations that's keeping the market at this level, not actual economic activity... there is some good data coming out of Europe and reasonable economic data coming out of the U.S., but it still doesn't suggest that we're soaking up supply."
FUNDAMENTALS
* On the New York Mercantile Exchange, crude for May delivery was trading at $108.54, down 29 by 0050 GMT after settling at $108.83 a barrel, the highest since Sept. 22, 2008, when front-month contract prices ended at $120.92.
* In London, ICE Brent crude for May delivery was trading at $121.77, down 53 cents after settling at $122.30. It was the highest settlement since front-month Brent closed at $124.18 on Aug. 1, 2008.
* Oil prices will soar above $130 a barrel by late 2011, a new Reuters poll found, and one in five traders said they expected oil to hit $150 this year, levels some economists say could trigger recession.[ID:nN06206555]
* The U.S. rebuffed a personal appeal from Muammar Gaddafi to President Barack Obama to stop an "unjust war" and demanded the Libyan leader withdraw his forces and go into exile. Libya said on Wednesday a British air strike had hit its major Sarir oilfield and damaged a pipeline connecting the deposit to a Mediterranean port.[ID:nN06271625][ID:nLDE7352E8]
* U.S. crude oil inventories rose 1.95 million barrels last week, the U.S. Energy Information Administration said, higher than the forecast for a 1.7-million-barrel rise in a Reuters poll. The data contradicted the American Petroleum Institute's report late Tuesday of a 2.8-million-barrel drawdown.
* OPEC ministers brushed aside worries that inflated fuel prices will slow economic growth, saying there was little more they can do to rein in $120-a-barrel crude. [ID:nLDE7351IF]
* A tanker sailed from an east Libyan port headed towards Asia and believed to be carrying the first oil shipment from rebel-held territory, shipping sources said, but the potential buyer's identity remained unknown. [ID:nLDE735262]
* Production at rebel-held oilfields in eastern Libya has stopped after they came under attack from pro-Gaddafi forces, a rebel spokesman said. [ID:nWEA3146]
* Saudi Arabia and its Gulf allies are trying to broker a deal to have Yemen's president step down. [ID:nLDE73514X]
MARKETS NEWS
* Japan's Nikkei average was up nearly 1 percent shortly after the opening on Thursday as falls in the prior two sessions took the market to levels investors found attractive, especially after convincing gains in the U.S. and other overseas equities markets. [ID:nL3E7F701C]
* The yen held near a six-month low against the dollar on Thursday and an 11-month trough versus the euro ahead of monetary policy meetings in Japan and the euro zone that are expected to reinforce widening interest rate differentials.
* Gold held steady near a record on Thursday ahead of an expected euro zone interest rate hike, while silver barely moved after rising to its highest in more than three decades in the previous session on lingering worries about inflation.
* Copper ended sharply higher on Wednesday, posting its biggest one-day gain in two weeks as currency-related buying and perceptions of healthier Chinese purchases fed the rally. (Reporting by Rebekah Kebede in PERTH, Gene Ramos and Robert Gibbons in NEW YORK; Editing by Himani Sarkar)