* Venezuela says Libyan government accepts peace proposal
* Arab League says Libyan peace plan under consideration
* Libyan rebel leader says no interest in negotiating
* Obama says U.S. must be ready to act quickly on Libya
* Coming Up: US February jobs data, 8:30 a.m. EST, Friday
(Recasts, updates prices, market activity)
By Gene Ramos and Robert Gibbons
NEW YORK, March 3 (Reuters) - Oil prices fell from near
2-1/2-year highs on Thursday as traders took profits after
Venezuela pitched a plan to resolve the Libyan crisis, even
though the market was deeply skeptical about whether it would
work.
The pull-back follows two days of strong gains that sent a
key technical indicator to its most overbought level in more
than five years for Brent crude. 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".
[]
At the White House, U.S. President Barack Obama said his
administration was preparing a full range of options over
Libya. The United States and international community must be
ready to act rapidly if warranted by a humanitarian crisis or
to stop violence against civilians in the North African
country, Obama said. []
Brent crude futures for April delivery <LCOc1> settled
$1.56 lower at $114.79 a barrel, after dropping to a session
low of $113.09. It had settled at $116.35 on Wednesday, the
highest close since August 2008.
U.S. crude futures for April <CLc1> settled at $101.91,
down 32 cents, after hitting a low of $100.15. On Wednesday, it
closed at $102.23, the first time U.S. crude had finished above
$100 since September 2008.
The 14-day Relative Strength Index for Brent touched 79 on
Wednesday, the highest level since March 2005, while U.S. crude
topped 74, the highest in over 2-1/2 years. Technical analysts
consider anything over 70 is overbought.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic on Brent's Relative Strength Index:
http://link.reuters.com/wub48r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
"Looks like profit taking and buying into the dip. The
market was a little overstretched to the upside and the Chavez
peace proposal gave traders a reason to square positions," said
Tom Bentz, broker at BNP Paribas Commodities Futures Inc in
New York.
Open interest in U.S. crude futures has been on the rise in
recent sessions and on Wednesday, it hit 1,574,584 lots, just
below the record 1,579,109 set on July 16, 2007.
Brent's premium to U.S. crude <CL-LCO1=R> shrank to below
$13 after last week's record $16.91. Investors were unwinding
some positions on the Brent-West Texas Intermediate spread,
knocking down Brent faster than U.S. crude, traders said.
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
Brent premium http://graphics.thomsonreuters.com/gfx/MR
20110303110446.jpg
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
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 last week 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 New York;
Christopher Johnson in London; Editing by Marguerita Choy)
