* Libya halts all military action - foreign minister
* Oil drops more than $1
* Saudi King issues decrees after Friday prayers
(Updates prices, analyst comments)
By Nia Williams
LONDON, March 18 (Reuters) - Oil prices fell on Friday after
the Libyan foreign minister said Libya would halt all military
action and accepted a U.N. resolution for an
immediate ceasefire.
Brent crude <LCOc1> was trading 49 cents lower at $114.41 by
1308 GMT, off a session high of $117.29 and up from the day's
low of $113.07. U.S. crude <CLc1> shed 27 cents to $101.15.
"We decided on an immediate ceasefire and on an immediate
stop to all military operations," Libyan Foreign Minister Moussa
Koussa told reporters. []
The announcement followed a United Nations meeting on
Thursday in which the security council authorised Western-led
military intervention against Muammar Gaddafi who had vowed to
crush a rebel uprising in the country.
The U.N. also authorised "all necessary measures" -- code
for military action -- to protect civilians against Gaddafi's
forces. []
Oil markets had risen to their highest in more than a week
following the U.N. resolution and, although the ceasefire
triggered a sell-off, analysts noted the situation was still
complex.
"This does not mean we near a resolution of the situation in
Libya. We may be facing the possibility of an entrenched status
quo between pro and anti Gaddafi groups," said Harry
Tchilinguirian, analyst at BNP Paribas.
"This only maintains the uncertainty in terms of when we
will eventually have a full resumption of production in Libya."
Libya pumped 1.6 million barrels per day (bpd) of sweet,
light crude before violent unrest broke out earlier this year.
BAHRAIN, SAUDI
The situation was also still volatile in Bahrain, where
earlier this week the authorities cracked down on Shi'ite
protesters demanding reform by the Sunni monarchy, drawing
criticism from the United States and Iran.
Sunni-ruled ally Saudi Arabia, OPEC's largest oil producer,
has sent troops into Bahrain, together with other forces from
the Gulf Cooperation Council (GCC).
As it monitors unrest in its oil-producing east, home to its
Shi'ite minority, Saudi Arabia on Friday announced billions of
dollars in handouts for its people and boosted its security
apparatus. []
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Libya no-fly zone graphics http://link.reuters.com/wub68r
More on Middle East unrest: [] []
Western forces in region http://link.reuters.com/jen38r
Latest graphic: http://r.reuters.com/nym77r
Interactive factbox http://link.reuters.com/puk87r
Graphic on air bases http://link.reuters.com/zyk48r
Graphic on missile defences http://link.reuters.com/wem48r
Graphic on no-fly zone http://link.reuters.com/wub68r
Breakingviews-Crude bullied by black swans []
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JAPAN DISASTER
Concern about unrest in the Middle East drove oil prices to
a two and a half year high of nearly $120 last month, but they
lost some of their strength after Japan's strongest earthquake
on record a week ago.
The resulting nuclear crisis sent risk-averse sentiment
coursing through global financial markets.
Engineers said on Friday burying a crippled nuclear plant in
sand and concrete might be the only way to prevent a
catastrophic radiation release, the method used to seal huge
leakages from Chernobyl in 1986. []
Edward Meir, senior commodities analyst at brokers MF
Global, said oil prices had risen too far considering the loss
of demand from Japan, the world's third largest economy and
third biggest oil consumer after the United States and China.
"The extended paralysis with regard to the nuclear issue and
the colossal damage sustained in the rest of the country,
suggests that Japan will be partially absent from the oil
markets for some time to come," he said.
(Additional reporting by Alejandro Barbajosa; editing by
Barbara Lewis)
