* U.S. crude falls over $1 to intraday low of $104.20
* Libyan rebels regain control of east Libya oil terminals
* Qatar recognises Libyan rebel body as legitimate
(Updates prices, adds fresh quotes)
By Claire Milhench
LONDON, March 28 (Reuters) - Oil retreated on Monday, with
both U.S. and Brent crudes down over a dollar, after Libyan
rebels regained control of key oil towns and the dollar
strengthened on hawkish comments from a U.S. central banker.
U.S. crude <CLc1> was down $1.07 to $104.33 a barrel at 1210
GMT after earlier dipping to $104.20. Brent crude for May
<LCOc1> was down $1 to $114.59 a barrel, after slipping to
$114.55.
Michael Hewson, an analyst at CMC Markets, attributed the
fall to the slightly stronger dollar <.DXY> following comments
late last week from Charles Plosser, president of the
Philadelphia Federal Reserve.
Plosser said the U.S. central bank would have to reverse its
easy money policy in the "not-too-distant future" to avoid
sowing the seeds of inflation. [].
A stronger dollar <.DXY> means that commodities priced in
dollars are more expensive for those using other currencies.
"Nothing has really changed from a Middle East perspective,"
Hewson said. "That's not a situation that will go away any time
soon."
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 are now advancing on leader Muammar Gaddafi's hometown
of Sirte, streaming west along the main coastal road.
[]
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, an oil analyst at
Petromatrix.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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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LIBYA PROSPECTS
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."
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."
Hewson also suggested that concerns about sovereign debt in
Europe could be weighing on sentiment with respect to future
demand. "Will a default in Greece or Portugal affect growth in
the eurozone or demand for crude oil?"
He stressed that crude would not come crashing down due to
underpinning from the Middle East, but added: "In the short term
it looks fairly quiet. We haven't seen much in the way of decent
volumes today."
In Yemen, talks on a transition from President Ali Abdullah
Saleh's rule have stalled in a public game of brinkmanship, but
sources close to the discussions say a deal is still within
reach. []
(With additional reporting by Alejandro Barbajosa in
Singapore, editing by Jane Baird)
