Oil prices fell on Friday after a massive earthquake shook Japan, shutting refineries and other industrial facilities in the world's third-largest oil consumer.

Brent was poised to post a weekly loss for the first time in seven weeks, with U.S. crude on track to end down for the first week in four.

As the implications for oil demand in Japan and the region received attention, investors also monitored a planned day of protests in top oil exporter Saudi Arabia and the violence in Libya, where oil exports have been disrupted.

Brent crude futures for April delivery fell $1.39 to $114.04 a barrel at 12:51 p.m. EST (1751 GMT), having fallen as low as $112.25.

U.S. crude futures for April delivery fell $1.71 to $100.99 a barrel, having fallen earlier to $99.01.

With the earthquake shutting some refineries in Japan, the U.S. front-month gasoline crack spread, or refining profit margin rose 43 cents to $24.55.

The heating oil crack spread rose $1.08 to $26.26 a barrel.

From an oil pricing perspective, the situation in Japan is likely to result in a negative impact on crude oil prices and a positive for refined products, said Dominick Chirichella, senior partner at the Energy Management Institute in New York.

Brent's premium to the U.S. benchmark West Texas Intermediate crude rose 49 cents to $13.08 a barrel, after falling below $8 this week and reaching a record above $17 last week.

Japan was hit by a magnitude 8.9 earthquake, the largest since observations began in the late 19th century.

While the full extent of damage was still being assessed, analysts said the images and reports so far did not suggest a major economic and financial disaster.

Crude oil futures have fallen sharply as a sizable portion of Japan's oil refinery capacity has been shut due to the earthquake and tsunami. Data from China showing higher inflation also added pressure, said Joe Posillico, broker at MF Global in New York.

Posillico said the question going forward would be, how long Japan's crude oil demand will be affected.


Saudi Arabian police flooded the streets of the kingdom's capital to deter a planned day of demonstrations, while a small Shi'ite demonstration was reported in Hofuf, in the oil-producing Eastern province.

Riot police fired tear gas to break up a small, peaceful demonstration by stateless Arabs demanding greater rights in Kuwait, another key exporter.

Fighting continued in OPEC-member Libya. Rebels repelled a counter-offensive by leader Muammar Gaddafi's forces, but appealed to foreign powers to impose a no-fly zone to stop further attacks.

Looking further forward it would be optimistic to expect Libyan oil production to return to normal levels this year, Lawrence Eagles with J.P. Morgan said in a research note.

Bahraini police blocked several thousand protesters from reaching the royal palace as the region continued to deal with spreading unrest.

Tens of thousands of protesters marched in Yemen's capital and protests turned violent in the southern port city of Aden.

(Additional reporting by Gene Ramos and Janet McGurty in New York, Ikuko Kurahone in London and Alejandro Barbajosa in Singapore; Editing by Marguerita Choy)