SINGAPORE, March 17 - Brent crude fell by as much as 1 percent on Thursday to below $110 as Japan's worsening nuclear crisis buffeted stock markets, raising questions about the impact of the earthquake on growth and energy demand.

Mounting fears as Japan takes desperate measures to cool reactors at the stricken Fukushima nuclear plant overshadowed supply worries caused by tensions in the Middle East.

There is so much uncertainty in Japan and its ability to drive economic recovery that it's something that is casting a shadow on the outlook for global growth, said Ben Westmore, a commodities analyst at National Australia Bank.

While that shadow lasts, it's going to be difficult for oil prices to go higher. With risk aversion some money has come out of the oil market, and there is some aversion because the demand outlook remains so uncertain.

Brent crude for May, the front-month contract after April's expiry on Wednesday, fell as much as $1.15 to $109.45 and was down 51 cents at $110.09 at 12:02 a.m. ET. Prices have slid almost 5 percent since Japan's earthquake and tsunami struck six days ago, touching a three-week low of $107.35 on Wednesday.

Prices reached a 2-1/2-year intraday high of $119.79 on February 24 as violence in Libya disrupted the country's oil output. OPEC members including Saudi Arabia have increased production partly to compensate for the loss of as much as two-thirds of Libyan supplies, at the same time eroding spare capacity.

Bahraini forces used tanks and helicopters to drive protesters from the streets on Wednesday clearing a camp that had become a symbol of the Shi'ite Muslim uprising and drawing rare criticism from their U.S. allies.

The violence that has transformed a crisis between the island's majority Shi'ites and minority Sunnis into a regional standoff between Sunni Gulf Arab states and non-Arab Shi'ite power Iran.

Bahrain lies less than 100 km from the hub of the Saudi oil industry at Dhahran, including the world's largest oil fields, oil terminal and processing plant. Recent demonstrations by Saudi Shi'ites have also centered in the kingdom's Eastern Province.

It's all about Saudi Arabia, Westmore said. Anything that causes unrest in Saudi Arabia or causes a supply side event in the Middle East will cause a sharp rebound in prices, he said.

Still, the effect of gloomy financial markets on oil prevailed on Thursday. Japanese stocks slid 3 percent on after a surge in the yen to a record high stoked fears that a stronger currency would compound the economic hit from a worsening nuclear crisis. <.T>

Operators of the quake-crippled nuclear plant in Japan dumped water on overheating reactors on Thursday while the United States expressed growing alarm about leaking radiation and urged its citizens to stay well clear of the area.

In Libya, the battle for control of rebel capital Benghazi looked just hours away after the Libyan army told people to leave opposition-held locations and arms storage areas, but residents said the city was quiet.

U.S. Crude for April shed 17 cents to $97.81.

(Editing by Himani Sarkar)