New this morning: Oil slips under $104 despite battles in Libya

Photo by Chris Baylor

Photo by Chris Baylor

Oil prices slipped below $104 a barrel on Thursday but remained elevated, as well as highly volatile, in light of the ongoing battle for control of Libya.

Investors are keeping a close watch on developments in the country, especially as its crude production has fallen more than previously estimated as the fighting near key oil installations has intensified.

Sentiment in the oil markets over the past few weeks has been driven by developments in North Africa, most recently in Libya, which in normal times produces a little under 2 percent of the world's global oil needs.

Though oil prices have dipped modestly over the past couple of days they remain at historically high levels.

By early afternoon in Europe, benchmark crude for April delivery was down 56 cents at $103.82 a barrel in electronic trading on the New York Mercantile Exchange. Meanwhile, Brent crude was down 84 cents at $115.10 a barrel on the ICE futures exchange.

The declines come despite news that Libya's oil production has been cut to 500,000 barrels a day from 1.6 million since a rebellion against Moammar Gadhafi began last month, National Oil Corp. chief Shukri Ghanem said Wednesday. Ghanem had previously estimated the OPEC nation's output had been reduced by about half.