* U.S. crude falls over $1 to intraday low of $103.60
* Libyan rebels regain control of east Libya oil terminals
* U.S. inflation rising at fastest pace since June 2009
(Updates prices, adds US consumer spending data)
By Claire Milhench
LONDON, March 28 (Reuters) - Oil retreated on Monday, with
both U.S. and Brent crude futures slipping over a dollar, after
Libyan rebels regained control of key oil towns and the dollar
firmed on hawkish comments from a U.S. central banker.
U.S. crude <CLc1> was down $1.66 to $103.74 a barrel at 1332
GMT after earlier dipping to $103.60. Brent crude for May
<LCOc1> was down 94 cents to $114.65 a barrel, after slipping to
an intraday low of $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.
A stronger dollar <.DXY> means that commodities priced in
dollars are more expensive for those using other currencies.
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. [].
Data released on Monday seemed to vindicate Plosser's
comments as high food and energy prices pushed up U.S. inflation
in February.
The Commerce Department said the personal consumption
expenditures price index rose 0.4 percent, the fastest since
June 2009, after gaining 0.3 percent in January [].
"This move lower in oil prices looks to be largely dollar
driven because 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, heading
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 become the first Arab country to recognise Libya's
rebels as the people's sole legitimate representative, in a move
that may presage similar moves from other Gulf states.
[]
"These are positive developments, which are negative for oil
prices potentially," said Olivier Jakob, an oil analyst at
Petromatrix.
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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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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 not persuaded that things
will return to normal quickly.
"While Libyan rebels claim to be able to get the exports out
of the country within a week, we remain sceptical," said Amrita
Sen, oil analyst at Barclays Capital in a note.
"There remains a significant legal and contractual basis to
all oil trade, and before a unitary government emerges it may be
extremely difficult to get a steady flow of oil out of Libya."
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?"
In Syria, forces opened fire to disperse hundreds of
protesters in Deraa calling for an end to emergency laws, but
demonstrators regrouped despite a heavy troop deployment, a
witness said. []
(With additional reporting by Alejandro Barbajosa in
Singapore; editing by Keiron Henderson)
