Oil prices seesawed Friday in volatile trading on uncertainty after Libya's government said it would halt military action to comply with a UN resolution authorizing a no-fly zone and attacks on forces loyal to Libyan leader Moammar Gadhafi.
Both Brent and U.S. crude futures pulled back several dollars and turned lower after Libya's government declared a unilateral ceasefire in its offensive against rebels.
Uncertainty about the stability of any ceasefire limited the price drop amid reports that Gaddafi's forces continued to fire at rebel-held towns.
Total U.S. and Brent crude trading volumes were heavy, already surpassing 350,000 lots, after prices jumped nearly 4 per cent on Thursday in light volume as the market weighed the potential impact of Libya's conflict, Middle East tensions and Japan's nuclear crisis.
Brent crude futures for May delivery fell 40 cents to $114.50 a barrel by 11:14 a.m. EDT (1514 GMT), off an earlier $117.29 peak.
U.S. crude futures for April delivery fell 20 cents to $101.22 a barrel, off its high of $103.66, but having bounced off a $100.32 low.
"This does not mean we near a resolution of the situation in Libya. We may be facing the possibility of an entrenched status quo between pro and anti-Gadhafi groups," said Harry Tchilinguirian, analyst at BNP Paribas.
"This only maintains the uncertainty in terms of when we will eventually have a full resumption of production in Libya."
Libyan authorities must comply with all elements of the United Nations resolution on the end of hostilities, UN Secretary-General Ban Ki-moon said at a news conference in Madrid.
France said it remained cautious as the threat on the ground in Libya had not been lifted and Britain said Col. Gadhafi would be judged by his actions rather than his words.
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