* Venezuelan proposal to end Libya crisis unlikely to
succeed
* Technicals show U.S. crude due for correction
* Coming Up: U.S. non-farm payrolls, 1330 GMT
By Nick Trevethan and Florence Tan
SINGAPORE, March 4 (Reuters) - Brent oil rose above $115 on
Friday spurred by doubts whether a Venezuelan peace proposal
would resolve Libya's crisis while payrolls data from the United
States are likely to reaffirm a recovery in the world's largest
energy user.
Venezuelan President Hugo Chavez said Libya's Muammar
Gaddafi had agreed to proposals for an international panel to
negotiate an end to the turmoil in the world's 12th largest oil
exporting nation.
But a rebel leader rejected talks, the response from the
Arab League was lukewarm and energy analysts consulted by
Reuters said they saw little chance any Chavez-backed plan would
succeed.
"It is unrealistic. Nobody believes that Chavez's idea would
be workable," said Tetsu Emori, a Tokyo-based commodities fund
manager at Astmax Investments.
Brent crude futures for April delivery rose 56 cents
to $115.35 a barrel by 0328 GMT, after sliding more than $1 on
Thursday, when the Libya peace plan was announced.
U.S. crude futures for April gained 44 cents to
$102.35 a barrel. Both contracts are on track to post a second
straight weekly rise.
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.
"I feel, more than the peace plan, the direction that UN
sanctions could take in the long run will impact the economy of
Libya more and consequently its oil industry."
Open interest in U.S. crude futures has been on the rise in
recent sessions, nearing record highs as bullish investors
position themselves for further supply shocks.
That has also driven technical indicators into overbought
territory with the relative strength indicator at 75 for Brent
and 74 for WTI. A read above 70 denotes a market is overbought.
"Even if the conflict there were to be peacefully resolved
-- which seems a long shot -- there are flash-points in Egypt,
Tunisia, Yemen and Bahrain to consider," Peter Beutel, president
of U.S. trading advisory Cameron Hanover said in a March 3 note.
This has increased the pressure to liquidate positions at
some stage although traders are likely to buy back on dips as
the turmoil in the Middle East and Africa could last for months,
Astmax's Emori said.
This would support prices above $100 and probably Brent will
head to $150 a barrel within a year, he added.
That sell-and-buy back behaviour was very much in evidence
on Thursday when the initial news of the Chavez plan sent Brent
sliding by more than $3 to a low of $113.09 in the space of an
hour or so, but prices quickly recovered, and the market ended
the day down $1.56.
A fall in U.S. jobless claims to the lowest level in more
than 2-1/2 years has also underpinned oil prices.
U.S. nonfarm payrolls data due later on Friday are expected
to have risen in February after being held down by extreme
winter weather in January.
Employment is expected to have increased by 185,000, which
would be the largest gain in almost a year.
(Editing by Clarence Fernandez)
