Oil prices fell this evening as Venezuela said its proposal for a negotiated solution to the Libyan conflict was accepted by the North African government and the Arab League said the plan was being considered.
The Libyan government has accepted Venezuela's plan for an international commission to seek a solution to the crisis, a spokesman for Venezuelan President Hugo Chavez said.
Brent crude fell $1.63 to $114.72 a barrel, while US crude dropped 77 cents to $101.46. Brent's price rise amid the recent turmoil in North Africa and the Middle East has been stronger because Europe is more vulnerable to supply disruptions from Libya and the region.
Analysts remained sceptical of the chances any Chavez-backed plan would succeed and were worried about damage to Libyan oil infrastructure as a result of the fighting.
Libyan output has fallen to 700,000-750,000 barrels per day (bpd) as most foreign oil workers had taken flight, according to Shokri Ghanem, the head of Libya's state-owned oil company..
US crude's losses were limited by data showing initial jobless claims in the US fell by more than expected last week.
