* Euro hits 14-month high ahead of ECB rate decision
* Libyan rebels call on NATO for more strikes
* Coming up: EIA weekly inventory report
(Adds quotes, updates throughout)
By Dmitry Zhdannikov and Seng Li Peng
LONDON, April 6 (Reuters) - Oil prices stayed near a 2-1/2
year peak on Wednesday supported by widespread unrest in the
Middle East and North Africa and dollar weakness ahead of
Europe's central bank rate decision on Thursday.
Brent crude <LCOc1> traded above $122 a barrel at 0830 GMT
and U.S. crude <CLc1> was at $108.5 a barrel, broadly flat
versus Tuesday's close.
The European central bank is expected to raise interest
rates by 0.25 percent on Thursday in the first hike since the
2008 financial crisis. The expectations have propelled the euro
to a 14-month high while the dollar index <DXY.> was down 0.37
percent at 0835 GMT.
"Central bankers will always claim that they have no
influence on oil prices but recent history has repetitively
shown that in the new world where commodities are a global
asset, central bankers can have a greater influence on oil
prices than OPEC," said Olivier Jakob from Petromatrix.
The rally in the euro took place even though Moody's rating
agency downgraded several Portuguese banks. []
Analysts noted that a wide return of risk appetite amid
expectations of strong recovery in the United States has
outweighted yet another increase in China's interest rates on
Tuesday, the fourth since October, to tame inflation.
"China is supposed to be leading the commodity complex but
an increase of Chinese rates is not anymore a trading input for
more than a few minutes," said Jakob.
Singapore-based Serene Lim of ANZ said the impact from the
hike would be mitigated by the turmoil in Libya.
"It is a stalemate in Libya and this will give support to
oil prices, which are trading at a very tight range," she said.
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For latest U.S. oil inventory data see: [] []
FACTBOX on Libya's oil production: []
More on Middle East unrest: []
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In Libya, the head of the rebel army said NATO had been too
slow to order air strikes to protect civilians. []
In Bahrain, firms have fired hundreds of mostly Shi'ite
Muslim workers who went on strike to support pro-democracy
protesters, an opposition group said on Tuesday, in what
appeared to be part of a government crackdown. []
A forecasts for a rise in U.S. stockpiles in government data
due out later on Wednesday could dampen sentiment after Brent's
four-day, 6-percent rally.
Technical analysis showed Brent could rise above $126, said
Reuters analyst Wang Tao. []
"Technically, it is possible for Brent to go to $125 a
barrel within this week," said Ken Hasegawa, commodity
derivatives manager at Japan's Newedge brokerage.
Brent's rally to above $120 a barrel could soon fizzle out,
according to a majority of traders and analysts in a Reuters
poll released on Wednesday. But they expected Brent to roar back
above $130 in the second half of this year. []
(Reporting by Dmitry Zhdannikov and Seng Li Peng; editing by
Jason Neely)
