GLOBAL MARKETS WEEKAHEAD-Libya to push up oil,cool risk appetite

> By Gertrude Chavez-Dreyfuss and Jeremy GauntNEW YORK/LONDON, March 20 (Reuters) - Investors already bruised by the Japan disaster now confront military air strikes on Libya and the prospect of rising oil prices, making it likely they will postpone any bold investment decisions. Until a clearer picture emerges, they will want to steer clear of riskier assets as they recalibrate positions. One thing seems certain: Oil prices will renew their advance posing a new challenge for global recovery. Some analysts said benchmark Brent crude LCOc1 could surge $5 toward the recent two-and-a-half year peak of $119.79, after closing Friday at $113.93 a barrel. Western forces pounded Libya's air defenses over the weekend to repel Libyan leader Muammar Gaddafi from rebel strongholds as they enforced a U.N.

"> By Gertrude Chavez-Dreyfuss and Jeremy GauntNEW YORK/LONDON, March 20 (Reuters) - Investors already bruised by the Japan disaster now confront military air strikes on Libya and the prospect of rising oil prices, making it likely they will postpone any bold investment decisions"Resolution. The attacks are set to continue in coming days. [ID:nLDE72J009]. Analysts said the strikes create fresh uncertainty."It's an open-ended question because we don't know whether the air strike on Libya will turn into a quagmire or a quick victory,' said Boris Schlossberg, a currency strategist at GFT in New York. "If the situation drags on, this will make investors pull in their horns because it creates yet another geopolitical hotpoint." The United States said Sunday it expects to conduct more air strikes on Libya as part of enforcing a U.N.

resolution. As the Japanese nuclear crisis unfolded last week and the death toll from the tsunami rose, investors pulled out of riskier assets pressuring global stocks, while the yen surged on the prospect of Japanese investors bringing their money home. Oil already had advanced last week and further gains could threaten to manacle future global economic growth. It is enough to make some longer-term investors freeze, or at least sit on the sidelines and not make major moves. "The situation is too fluid and too uncertain to warrant changes," Joost van Leenders, strategist at BNP Paribas Investment Partners, said in a note to clients.

"Some analysts said benchmark Brent crude LCOc1 could surge $5 toward the recent two-and-a-half year peak of $119.79, after closing Friday at $113.93 a barrel"Equity market losses since the earthquake in Japan have been around 2 percent, as measured by the MSCI World Index .MIWD00000PUS. In Tokyo losses were worse., falling 10 percent. Volatility has risen, but is still far from where it was during the height of the euro-zone debt crisis. Aside from Libya, Bahrain is also in focus, having cracked down on mainly Shi'ite Muslim protesters, a move that has angered Iran and raised tensions in the oil-exporting region. [ID:nnLDE72J020].

In Yemen, the president sacked the cabinet after deadly protests.[ID:nLDE72J0BX]. Unrest shook Syria on Sunday and Saudis gathered to demand the release of prisoners [ID:nLDE72J042]. OIL, JAPAN ARE KEY The heart of the uncertainty for investors is what rising oil prices and Japan's earthquake, tsunami and nuclear breakdown will mean for the world economy and financial markets. 1 2 Next Stocks Currencies Bonds News Bonds Global Markets Tweet this Share this Link this Digg this Email Reprints