* Venezuela says Libyan government accepts peace proposal
* Arab League says Libyan peace plan under consideration
* Libyan rebel leader says no interest in negotiating
* Coming Up: US February jobs data, 8:30 a.m. EST, Friday
(Recasts, updates prices, market activity, adds by-line)
By Gene Ramos and Robert Gibbons
NEW YORK, March 3 (Reuters) - Oil prices retreated from
near 2-1/2 year highs on Thursday as traders took profits after
Venezuela pitched a plan to resolve the Libyan crisis, despite
deep skepticism about whether it would work.
The pull-back follows two days of strong gains that sent a
key technical indicator into the deepest overbought territory
in nearly two years. Few traders expect any quick resolution to
the violence that has halved Libyan oil output and sparked
concerns over unrest across the Middle East.
"I am highly skeptical the market is coming off on
assumptions that Chavez will successfully mediate in Libya,"
said Stephen Schork, editor of The Schork Report in Villanova,
Pennsylvania. "I think the market was overbought."
Venezuelan President Hugo Chavez's plan to negotiate a
resolution met with little immediate support. The chairman of
the rebel National Libyan Council entirely rejected any talks
with Libyan leader Muammar Gaddafi while Arab League President
Amr Moussa said it was merely "under consideration".
[]
By 1:30 p.m. EST (1830 GMT), Brent crude futures for April
delivery <LCOc1> was down $2.02 at $114.33 a barrel, after
ending at $116.35 on Wednesday, the highest close since August
2008.
U.S. crude futures for April <CLc1> fell $1.16 to $101.07,
after hitting a low of $100.15.
Brent's premium to U.S. crude <CL-LCO1=R> contracted to
below $14 after last week's record $16.91. Some traders said
investors were unwinding some positions on the Brent-West Texas
Intermediate spread, knocking down Brent faster than U.S.
crude.
LIBYA CUT, EMPTY TANKERS SAIL
Libyan output has fallen to 700,000-750,000 barrels per day
from normal levels of 1.6 million bpd as most foreign oil
workers had taken flight, according to Shokri Ghanem, the head
of Libya's state-owned oil company. [].
Despite the unrest, tankers were still leaving and waiting
to enter Libya's ports, sources said. At least one empty tanker
left a Libyan terminal on Thursday to take on cargo in Egypt,
and at least two more tankers were waiting to enter Libyan
ports. []
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Reuters Insider show on Libyan oil company head interview:
http://link.reuters.com/jys38r
Graphics showing:
Middle East unrest http://r.reuters.com/nym77r
Oil price shocks http://r.reuters.com/qes28r
Countries most reliant on oil http://r.reuters.com/dux28r
Calculator: Oil impact on GDP http://r.reuters.com/jux28r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
POSITIVE U.S. DATA LIMITS LOSSES
U.S. crude's losses were softened by data showing that the
number of Americans filing for jobless benefits for the first
time fell to the lowest level in more than 2-1/2 years,
signaling stepped-up job creation could be under way.
The data falls outside the survey period for the
government's closely watched employment report for February due
out on Friday. A Reuters poll forecast nonfarm payrolls
probably rose but the unemployment rate was seen ticking up to
9.1 percent, from 9.0 percent in January. []
"If not for high oil prices we'd have been cheering all the
positive data, like the jobless claims, in the past few days,"
said Phil Flynn, analyst at PFGBest Research in Chicago.
"And the dollar is being smashed because of the ECB and the
likelihood that moves to fight inflation might mean lower
demand in Europe and the Brent market."
The euro rallied against the greenback after European
Central Bank President Jean-Claude Trichet cemented
expectations of a near-term interest rate rise. []
(Additional reporting by Matthew Robinson in London,
Christopher Johnson in London; Editing by Marguerita Choy)
