Oil prices slip towards $103 as traders eye Libya

Crude prices traded below $104 a barrel on Tuesday in Asia as Libyan rebels announced resumption of oil exports from the sites controlled by them.

Benchmark crude for May delivery was down 19 cents to $103.79 a barrel at midday Singapore time on the New York Mercantile Exchange. Brent crude was down 24 cents on the ICE futures exchange in London.

Oil prices slipped from two-year high of above $106 last week after coalition attacks on Moammar Gadhafi's forces helped the rebels gain control over key oil installations.

Rebel forces in Libya on Sunday occupied a pair of eastern coastal cities, Brega and Ras Lanuf, which included much of the nation's oil refining and exporting facilities.

Reports said that Qatar had agreed to market oil produced from the rebel-controlled sites. The country has recognized the rebel group Libyan National Council as the sole legitimate representative of the Libyan people, the Qatari state news agency reported.

Qatar is not only the second country (after France) to recognize the Libyan rebel council, but the motion has also been backed by the Gulf Co-operation Council (GCC), the six-member Persian Gulf bloc that includes Qatar.

Not only has Qatar has given the Libyan rebels a boost of legitimacy, but it had already provided warplanes to help impose a no fly zone over Libya, with the support of the United Nations and Arab League.

The rebel group plans to begin exports in less than a week and the oil fields have a capacity to produce between 100,000 and 130,000 barrels a day, CommodityOnline reported.

Libya’s oil output dropped by more than two-thirds to just 500,000 barrels per day from 1.6 million barrels since the rebellion against Gadhafi began in February, AFP reported, quoting Shukri Ghanem, chief of National Oil Corp.

The Libyan rebels claimed they have captured Sirte, the stronghold of the Gaddafi tribe, Al Jazeera had reported. A rebel advance into Sirte could be the heaviest blow to the tottering regime of Gaddafi since the uprising started.