Oil below $105 as Libyan rebels retake oil ports

[March 28, 2011]  SINGAPORE (AP) -- Oil prices slipped below $105 a barrel Monday in Asia as Libyan rebels retook control of two key port towns and said they would restart crude exports within weeks.

Benchmark crude for May delivery was down 53 cents to $104.87 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 20 cents to settle at $105.40 on Friday.

In London, Brent crude was down 61 cents at $114.98 a barrel on the ICE futures exchange.

Rebels recaptured oil complexes in the coastal cities of Ras Lanouf and Brega as strikes by coalition fighter jets and missiles pushed back forces loyal to Libyan leader Moammar Gadhafi. Rebels have vowed to quickly restart Libya's 1.6 million barrels per day of crude output, but many important foreign oil workers have fled the country and continued fighting makes tanker shipments risky.

Investors are also closely watching escalating protests in Syria and Yemen, the latest unrest in a wave of uprisings this year that unseated leaders from power in Tunisia and Egypt and sparked violent demonstrations throughout North Africa and the Middle East.

Some analysts expect strong global crude demand to continue this year, keeping oil above $100. Barclays Capital raised its 2011 average crude price forecast to $106 from $91.

"The positive demand shock of 2010 has continued into 2011," Barclays said. "Chinese oil demand has shown no signs of easing and the U.S. economy continues to grow and oil demand remains healthy, even in the face of retail prices approaching record levels."

In other Nymex trading for April contracts, heating oil fell 1.3 cents to $3.04 a gallon and gasoline dropped 1.2 cents to $3.03 a gallon. Natural gas added 3.1 cents to $4.43 per 1,000 cubic feet.

[Associated Press; By ALEX KENNEDY]

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.