Oil markets have seen volatile and rapid trading Oil prices eased back on Thursday amid speculation that the Arab League is considering a peace plan for Libya. Brent crude was trading around $115.80 a barrel, after almost touching $118 earlier, while US crude futures were down 35 cents at $101.88.
Arab League Secretary-General Amr Moussa said on Thursday a peace plan for Libya from Venezuela's President Hugo Chavez was "under consideration".
But oil analysts were sceptical that the plan would halt the rise in crude.
"The 'peace plan' for Libya obviously knocked the market lower but it doesn't seem to be having more than a passing impact on prices, which will probably head higher again," said Cartsen Fritsch, an analyst at Commerzbank.
Fighting in Libya appeared to be intensifying, and analysts warned prices would climb further if conditions in the country and other oil producing countries worsened.
"Any time oil moves higher, it gets people nervous about future growth and inflation," said Bart Melek of TD Bank Financial Group.
Seeking safety The recent spike in oil prices has raised fresh concerns about sluggish global economic growth.
Analysts say this is driving investors towards markets that present fewer risks, not least the traditional powerhouses such as Japan.
On Thursday, Tokyo's main Nikkei 225 index rose by 0.9%.
"Japan is seen as a safe haven at the moment, as there are few inflationary pressures," said Jamie Coutts of BGC Securities.
However, analysts warned that markets would remain volatile in the near future.
Robert Lutts of Cabot Money Management said that stock markets were adjusting to the new environment of high oil prices and beginning to realise that there was no short-term solution.
"We are going to live with this uncertainty for a some time," he said.