* Euro hits 14-month high ahead of ECB rate decision
* Libyan rebels call on NATO for more strikes
* Coming up: EIA weekly inventory report
(Adds quotes, updates throughout)
By Dmitry Zhdannikov
LONDON, April 6 (Reuters) - Oil prices stayed near a 2-1/2
year peak on Wednesday supported by widespread unrest in the
Middle East and North Africa and dollar weakness ahead of
Europe's central bank rate decision on Thursday.
Brent crude <LCOc1> traded above $122 a barrel at 1030 GMT
and U.S. crude <CLc1> was at $108.20 a barrel -- slightly above
and below their respective Tuesday closings.
The European central bank is expected to raise interest
rates by 0.25 percent on Thursday in the first hike since the
2008 financial crisis. The expectations have propelled the euro
to a 14-month high while the dollar index <.DXY> was down 0.35
percent at 1030 GMT.
"Central bankers will always claim that they have no
influence on oil prices but recent history has repetitively
shown that in the new world where commodities are a global
asset, central bankers can have a greater influence on oil
prices than OPEC," said Olivier Jakob from Petromatrix.
The rally in the euro took place even though Moody's rating
agency cut several Portuguese banks [] and the
country paid higher costs at a T-bill auction [].
Analysts noted that a wide return of risk appetite amid
expectations of strong recovery in the United States has
outweighed yet another increase in China's interest rates on
Tuesday, the fourth since October, to tame inflation.
"China is supposed to be leading the commodity complex but
an increase of Chinese rates is no longer a trading input for
more than a few minutes," said Jakob.
Singapore-based Serene Lim of ANZ said the impact from the
hike would be mitigated by the turmoil in Libya.
"It is a stalemate in Libya and this will give support to
oil prices, which are trading at a very tight range," she said.
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ECB in graphics http://r.reuters.com/kah88r
For latest U.S. oil inventory data see: [] []
FACTBOX on Libya's oil production: []
More on Middle East unrest: []
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In Libya, the head of the rebel army said NATO had been too
slow to order air strikes to protect civilians. []
In Bahrain, firms have fired hundreds of mostly Shi'ite
Muslim workers who went on strike to support pro-democracy
protesters, an opposition group said on Tuesday, in what
appeared to be part of a government crackdown. []
A forecast for a rise in U.S. stockpiles due out later on
Wednesday could dampen sentiment for U.S. crude. []
"It is hardly surprising that U.S. oil is not able to keep
up with the latest rally and is even tending a little softer,"
analysts at Commerzbank said in a note.
"This is because the tensions in North Africa are largely
behind the rise in prices while the supply situation in the U.S.
essentially remains relaxed."
Technical analysis showed Brent could rise above $126, said
Reuters analyst Wang Tao. []
Brent's rally to above $120 a barrel could soon fizzle out,
according to a majority of traders and analysts in a Reuters
poll released on Wednesday. But they expected Brent to roar back
above $130 in the second half of this year. []
(Reporting by Dmitry Zhdannikov and Seng Li Peng; editing by
Jason Neely and Keiron Henderson)
