World oil prices fell yesterday as traders kept an eye on war in Libya, where rebels said they have a deal with Qatar to resume oil exports that have been nearly shut down in the fighting.

New York’s main contract, light sweet crude for May, settled at $103.98 a barrel, a decline of $1.42 from Friday’s closing level.

In London, Brent North Sea crude for delivery in May shed 79 cents to close at $114.80 a barrel.

Qatar yesterday became the second country after France to recognise Libya’s rebel council, the Provisional Transitional National Council, as the “sole legitimate representative” of Libya.

The council, a 31-member body representing major cities and towns in the north African country, said on Sunday that rebel-held eastern Libya was already producing crude oil.

A PTNC official announced the council had signed a contract for Qatar to market the crude, and that exports were expected to start in “less than a week”.

“We are producing about 100,000 to 130,000 barrels a day – we can easily up that to about 300,000 a day,” Ali Tarhoni, the rebel representative responsible for economy, finance and oil, told a news conference.

Libya was producing 1.69 million barrels a day of crude before the unrest, but that had virtually ground to a halt.

“The acknowledgement of the rebel body as legitimate by a regional power, plus the inference over the weekend that oil production from the embattled country may be marketed with Qatar’s help, was perceived as bearish in the market,” said Lawrence Eagles at JPMorgan Chase Bank.