* 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
(Adds quotes, updates prices)
By Nick Trevethan and Florence Tan
SINGAPORE, March 4 (Reuters) - Brent oil held steady near
$115 on Friday over doubts that 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 11 cents
to $114.90 a barrel by 0446 GMT, after sliding more than $1 on
Thursday, when the Libya peace plan was announced.
U.S. crude futures for April rose 4 cents to $101.95
a barrel. Both contracts are on track to post a second straight
weekly rise.
Libyan rebels prepared for further attacks by forces loyal
to leader Muammar Gaddafi on Friday as both sides struggled for
control of a strategic coast road and oil industry facilities.
The country's oil 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.
Kaustav Mukherjee, a director at the Boston Consulting
Group, said: "Unless the (peace) plan lays out ways to address
the core issues in Libya, it'll probably meet with a lot of
publicity, but little else.
"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.
"If we start adding workers - and productivity continues to
improve -- it could be a remarkable achievement," Cameron's
Beutel said.
"What worries us is how much more consumers have had to pay
for oil since early September."
(Editing by Clarence Fernandez)
