* Libyan rebels regain control of east Libya oil terminals
* Qatar recognises Libyan rebel body as legitimate
* Bahrain's foreign minister scotches Kuwait mediation talk
(Updates prices, adds fresh quotes)
By Claire Milhench
LONDON, March 28 (Reuters) - Oil retreated on Monday with
Brent slipping to around $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 41 cents to $115.18 a
barrel by 1028 GMT, about $5 from a 2-1/2-year high near $120
reached last month. U.S. crude <CLc1> shed 63 cents to $104.77.
Libyan rebels regained control of all the main oil terminals
in the eastern half of Libya over the weekend: Es Sider, Ras
Lanuf, Brega, Zueitina and Tobruk. []
They advanced on leader Muammar Gaddafi's hometown of Sirte,
seeking to extend their advance west. []
[].
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. []
Qatar has recognised the rebel Libyan National Council as
the sole legitimate representative of the Libyan people, the
Qatari state news agency reported. []
"These are positive developments which are negative for oil
prices potentially," said Olivier Jakob, oil analyst at
Petromatrix.
He 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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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 and traders are sceptical about how
quickly things will return to normal.
"Maybe there's some hope that with rebels regaining control
of... 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."
John Drake, a senior risk consultant at UK-based consultancy
Ake said that it will be necessary to bring in specialist staff
to restart the damaged facilities, which could prove difficult
in the short term.
"They may require more pay, and insurance may also be more
of a challenge. It's also difficult at the moment to know what
kind of authorities you might be dealing with the rebel areas."
Christopher Bellew, an oil trader at Bache Commodities, was
also sceptical of any short term improvement in Libya.
"What the outcome of this war will be is by no means clear.
If they do manage to oust Gaddafi -- and it's that expectation
that is causing prices to fall -- it might not be a clean change
of regime. I just don't imagine that everybody's going to
suddenly settle down."
He also pointed to extra demand for oil from Japan given its
nuclear power station shutdowns, and continuing unrest elsewhere
in the Middle East, all providing a floor. "It's difficult to
see there being a steep fall in prices at the moment," he said.
(With additional reporting by Alejandro Barbajosa in
Singapore and Peter Apps in London)
