updated 3/18/2011 4:42:12 PM ET 2011-03-18T20:42:12

Oil prices settled slightly lower Friday after a volatile day marked by a U.N. resolution to use force to stop Moammar Gadhafi's violent attacks on rebels followed by a Libyan announcement of a cease-fire in hostilities.

Benchmark West Texas Intermediate crude for April delivery fell 35 cents to settle at $101.07 per barrel. It rose as high as $103.66 earlier in the session as the U.S., the U.K. and France prepared for military action against Libya under a U.N. resolution. In London, Brent crude lost 88 cents to settle at $113.77 per barrel on the ICE Futures exchange.

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Libya's Foreign Minister announced a cease-fire shortly after the U.N. voted to authorize a no-fly zone and "all necessary measures" to protect Libyan citizens from forces loyal to Gadhafi. There were reports that fighting continued outside the rebel stronghold of Benghazi and elsewhere. President Barack Obama said Friday afternoon that the U.S. intends to enforce the U.N. resolution, with military action if necessary.

Japan's struggle to stop the meltdown of a nuclear reactor damaged in last week's earthquake and tsunami injected more uncertainty into the markets on Friday.

Oil prices have surged as much as 27 percent in the past month as uprisings swept through North Africa and the Middle East. The region is home to OPEC heavyweights Saudi Arabia and Iran, and it produces 27 percent of the world's oil. In the past week prices have been pushed down by the expectation that Japan, the world's third-largest oil importer, initially would use less oil and gas because of damage to homes and factories. Analysts however believe Japan now will have to import more crude to cover power shortfalls from nuclear plant shutdowns.

Oil prices remain well above where they were before the Libya uprising began. The rebellion continues to cut off most of Libya's oil exports, which previously satisfied nearly 2 percent of world demand at 1.5 million barrels per day. Oil traders are also worried that any U.N. action, along with growing unrest in Bahrain and Yemen, will further erode trade relations between OPEC and the West.

The recent jump in oil has hit energy markets as the global economy gradually recovers from recession. Rising prices have helped keep U.S. gas pump prices at the highest levels ever for this time of year. Retail gasoline slipped less than a penny on Friday to a national average of $3.54 per gallon, according to AAA, Wright Express and Oil Price Information Service. That's still nearly 41 cents per gallon higher than a month ago and 74 cents more than the same time last year.

Moody's Investors Services said if oil stays above $100 per barrel, it will further weaken the global economic recovery. Moody's said oil could keep pushing airfares higher around the world, and food prices could rise as costs increase for fertilizers and fuel to run farm equipment and to transport produce. Automakers could see sales lag because of higher fuel prices.

The price rise will be an additional burden on Japan as it boosts imports while it recovers from the devastation of the earthquake and tsunami. Chevron already is shipping crude from Indonesia to Tokyo Electric Power Co., the country's biggest utility, to help with its energy needs. A Chevron spokesman wouldn't say how much was sent. And Royal Dutch Shell said it will provide more crude and liquefied natural gas (LNG) to Japan, both of which can run generators there.

Most of Japan's power is produced by coal-fired plants. It imports more coal than any country on earth, according to the U.S. Energy Department. Much of it comes from Australia.

Bob Ineson, a natural gas expert at IHS CERA, estimated that about 22 gigawatts of power is currently offline in Japan due to shutdowns at nuclear and coal-fired power plants. The International Energy Administration says utilities around Tokyo and just to the north, where the earthquake and tsunami hit, can generate around 105 gigawatts of power under normal conditions. The utilities have started rolling blackouts across those areas to cope with the shortfall.

Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates, said the international crises in Japan and Middle East-North Africa have totally rattled energy markets, and prices will continue to jerk up and down with every major headline.

"I've been trading oil commodities for 37 years and I've never seen such a vast array of items that this market has to digest each and every day," Ritterbusch said.

In other Nymex trading for April contracts, heating oil fell 4.06 cents to settle at $3.0243 per gallon and gasoline futures were flat, settling at $2.9494 per gallon. Natural gas added a penny to settle at $4.168 per 1,000 cubic feet.

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Explainer: Overview of Libya's oil resources

  • Image: A Libyan oil worker, works at a refinery inside the Brega oil complex
    AP

    OPEC member Libya is the 17th largest producer in the world, third largest producer in Africa and holds the continent's largest crude oil reserves. It normally pumps around 1.6 million bpd, 85 percent of which is exported to Europe and its output is equivalent to about 2 percent of global oil consumption.

  • Libya's place in the oil producing world

    How the country measures up in crude supplies and production.

  • Exports

    Before the war, Libya was a net exporter with domestic consumption estimated at only around 270,000 bpd.

    Europe was most affected by Libyan oil export disruptions. About 28 percent of Libya's oil went to Italy, 10 percent to Germany, 11 percent to China and France and 3 percent to the United States.

    Libyan oil accounted for about 23 percent of Ireland's oil and about 22 percent of Italy's, according to the IEA.

    Around 13 percent went east of the Suez Canal to Asia.

    The shortfall from the loss of Libyan output was covered by alternative sources such as Nigeria and Azerbaijan, which produce similar light crude oils to Libyan oil.

    Saudi Arabia also brought some it its spare capacity online, according to Saudi sources. The kingdom promised to fill any supply gap caused by the unrest in Libya although it produces heavier crude with higher sulfur content than Libya.

  • Infrastructure

    Reuters

    Oil fields
    Most of Libya's oil fields are located in and around the Sirte Basin, in the northeastern part of the country, which contains around 80 percent of the country's proven reserves.

    Other key areas include the Ghadames Basin, about 240 miles south of Tripoli and Cyrenaica Basin in the northeast and the Murzuq oil field in the desert in the south of the country.

    Libya has five domestic refineries with a combined capacity of 378,000 barrels a day:

    Azzawiya Oil Refining Co
    Sarir Refining
    Sirte Oil Co
    Tobruk Refining
    Ras Lanuf Oil & Gas Processing Co

    Ports
    Libya exported various grades of light crude from six major terminals, five of which are located in the eastern part of the country, where protests erupted near the second city of Benghazi.

    Following are the eastern terminals with pre-war loading volumes in January, 2011 provided by the IEA.

    Es Sider 447,000 barrels per day
    Marsa El Brega 51,000 bpd
    Ras Lanuf 195,000 bpd
    Tobruk 51,000 bpd
    Zueitina 214,000 bpd
    Zawiyah 199,000 bpd (January exports)
    Oother unspecified terminals 333,000 bpd

  • Companies

    Image: Libyan oil worker, works at a refinery inside the Brega oil complex
    AP

    Libya's state company
    Under the Gaddafi regime, Libya’s oil industry was run by the state-owned National Oil Corporation (NOC), which was responsible for managing exploration and production sharing agreements with international oil companies. Along with smaller subsidiary companies, the NOC accounted for around 50 percent of the country's oil output.

    Foreign players
    Major oil companies operating in Libya include:

    BP (Great Britain)
    ConocoPhillips (United States)
    Eni (Italy)
    ExxonMobil (United States)
    Hess Corp (United States)
    Marathon (United States)
    Occidental Petroleum (United States)
    OMV (Austria)
    Repsol (Spain)
    Shell (United States)
    Statoil (Norway)
    Wintershall, a unit of BASF (Germany)

Photos: Pain at the Pump

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Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 5.09%
$30K home equity loan FICO 5.21%
$75K home equity loan FICO 4.67%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.34%
13.34%
Cash Back Cards 17.82%
17.82%
Rewards Cards 17.07%
17.07%
Source: Bankrate.com