* Libyan rebels regain control of east Libya oil terminals
* Libyan rebels say Qatar agrees to market crude from east
* Bahrain's foreign minister scotches Kuwait mediation talk
(Recasts, adds fresh quotes, previous SINGAPORE)
By Claire Milhench
LONDON, March 28 (Reuters) - Oil retreated on Monday with
Brent slipping below $115 after Libyan rebels regained control
of key oil towns, and unrest over the weekend was limited to
minor crude exporters Syria and Yemen.
Brent crude for May <LCOc1> fell 82 cents to $114.77 a
barrel by 0822 GMT, about $5 from a 2-1/2-year high near $120
reached last month. U.S. crude <CLc1> shed 76 cents to $104.64.
Western-led military intervention in Libya's unrest prompted
speculators to raise their bets on higher prices by 6 percent
last week, before rebels took back a series of towns including
oil terminals over the weekend. []
A Libyan rebel official said on Sunday Gulf oil producer
Qatar had agreed to market crude oil produced from east Libyan
fields no longer in Muammar Gaddafi's control. []
"These are positive developments which are negative for oil
prices potentially as they have taken back some of the main oil
export towns," said Olivier Jakob, oil analyst at Petromatrix.
Rebels have regained control of all the main oil terminals
in the eastern half of Libya, namely Es Sider, Ras Lanuf, Brega,
Zueitina and Tobruk. On Monday, they also claimed to have taken
control of Sirte, Gaddafi's hometown. []
A Reuters reporter in Sirte said there was no indication the
city was under rebel control. []
Jakob also pointed to the fact that the dollar was slightly
stronger this morning. A stronger dollar <.DXY> means that
commodities priced in dollars are more expensive for those using
other currencies.
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More on EU-summit/credit: http://link.reuters.com/nub78r
Yemen timeline: http://link.reuters.com/bar68r
Saudi protests and oil: http://link.reuters.com/gew48r
More on Middle East unrest: [] []
Libya Graphics http://link.reuters.com/neg68r
Interactive graphic http://link.reuters.com/puk87r
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Output from Libya oilfields controlled by rebels was running
at about 100,000 to 130,000 barrels per day (bpd), which could
be increased to 300,000 bpd, Ali Tarhouni, a rebel official in
charge of economic, financial and oil matters, said on Sunday.
Libya was pumping about 1.6 million bpd before the rebellion.
But some analysts are sceptical about how quickly things
will return to normal.
"Maybe there's some hope that with rebels regaining control
of most of the Eastern part of Libya and the lion's share of
Libyan production, normality may resume soon but I think it is
still too early," said Carsten Fritsch, an analyst at
Commerzbank. "Damage to oil facilities will prevent a sudden
return to normal production levels."
EUROZONE DEBT
European leaders agreed a new package of anti-crisis
measures at a two-day summit, but were forced to delay
increasing their rescue fund and acknowledged they faced new
threats from a government collapse in Portugal. []
"The unrest in the Middle East is providing support, but the
Portugal crisis is capping gains," said Natalie Robertson, a
commodities analyst at ANZ.
"Investors will hold onto their long position until
something of significance occurs in the market. If they have
fully priced in the unrest, the market is susceptible to drops
due to profit taking."
Syria deployed the army to the country's main port over the
weekend in an attempt to rein in spreading protests across the
country, while in Yemen talks stalled between the government and
opposition. [] []
Bahrain's foreign minister said it was "completely untrue"
that Kuwait would mediate to resolve Bahrain's political crisis.
[]. The Gulf Cooperation Council -- a regional
political and economic bloc made up of Bahrain, Kuwait, Oman,
Qatar, Saudi Arabia and the United Arab Emirates -- had welcomed
the mediation move on Sunday.
Saudi Arabian King Abdullah earlier this month announced $93
billion in social handouts, the second benefits package to be
unveiled within a month as the kingdom attempts to contain
discontent, especially from Shi'ites in the east of the country,
where the world's biggest oil reserves are located.
"That's a reason oil is trending higher -- simply OPEC is
demanding a higher price for its oil, and the developments in
the Middle East are exacerbating that trend by pushing some
producers like Saudi Arabia to expand their expenditures at
rapid rates," Francisco Blanch, Bank of America Merrill Lynch's
global head of commodity research, told Reuters in Calgary.
"The economy is squarely reliant on oil and becoming a lot
more reliant because the unrest is forcing politicians in Saudi
to start throwing money at the problem."
(With additional reporting by Alejandro Barbajosa in Singapore
and Jeffrey Jones in Calgary; editing by James Jukwey)
