Oil rose 2 percent on Wednesday as escalating violence in the Middle East raised concerns about crude supplies, countering the wave of risk aversion sparked earlier this week by Japan's nuclear crisis.

Brent crude shot up $3 per barrel in early trade as focus shifted back to North Africa and the Middle East, where violence has cut supplies from OPEC member Libya and raised concerns about unrest in other producer nations in the region.

Oil pared gains and stock markets briefly turned negative following comments from EU Energy Commissioner Guenther Oettinger that Japan's nuclear site could face a further catastrophe in the coming hours.

The market rebounded again after his spokeswoman said the chief had no specific or privileged information on the situation -- which had pushed investors out of oil and stocks and into safer havens earlier in the week -- and Oettinger later said the comments were based on his personal fears.

Brent for April traded up $2.38 to $110.90 a barrel by 12:52 p.m. EDT, rebounding from its sharpest tumble in 13 months on Tuesday to a near three-week low of $107.35.

U.S. crude rose $1.12 to $98.30 a barrel.

MIDEAST UNREST

A crackdown on protesters in Bahrain, where troops from OPEC kingpin Saudi Arabia have intervened, resulted in at least four deaths, according to hospital sources, while clashes intensified in the streets of Yemen, Syria and Algeria.

Saudi is not happy about what is going on in Bahrain ... The situation in Bahrain is potentially destabilizing for Saudi Arabia, said David Morrison, a strategist at GFT.

Iranian President Mahmoud Ahmadinejad was quoted by state television condemning Bahrain's crackdown on mainly Shi'ite protesters as unjustifiable.

Muammar Gaddafi's advance in Libya added to uncertainty on Wednesday, as traders speculated whether the West would take measures resulting in prolonged loss of Libyan oil supplies.

U.S. gasoline futures got a boost from weekly data from the U.S. Energy Information Administration showing a steep 4.17 million barrel draw in stockpiles last week as companies reduced inventories of winter grade fuel ahead of the switch to summer blends.

Distillates inventories also fell, with crude stockpiles showing a slightly larger than expected build.

(Reporting by Gene Ramos, Robert Gibbons and Matthew Robinson in New York; Jessica Donati in London; Alejandro Barbajosa in Singapore; Editing by Marguerita Choy)

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