NEW YORK (CNNMoney) -- Oil prices ticked lower Friday after Libya declared a cease-fire following a United Nations' vote for a no-fly zone over the nation.
The U.N. late Thursday voted 10-0, with 5 abstentions, to impose a no-fly zone over Libya in an effort to protect civilians in the battle between rebels and forces loyal to leader Moammar Gadhafi.
Gadhafi's regime responded early Friday by declaring an immediate cease-fire.
"This is a complete change of heart from the Libyan defense officials," said Phil Flynn, senior market analyst at PFG Best. "Yesterday they were talking about attacking planes, and today they're calling for a cease-fire. The question is whether anyone believes them, and whether it's too late now."
After rising about 1% earlier in the session, U.S. oil prices for April delivery fell 35 cents to settle at $101.70 a barrel.
Brent crude, the benchmark European contract, fell 1.4% to $113.52 a barrel for May delivery.
The cease-fire announcement sent oil prices lower, Flynn said, because it eased some concerns about disrupted supply from the region. Libya is Africa's third-largest oil producer and sits atop the continent's largest reserves.
The situation in Libya has taken the spotlight for now, Flynn said, but he expected trade to vary widely throughout the day.
"There's violence in Bahrain and Yemen, and oil tankers going through the volatile Mediterranean," Flynn said. "And we don't know that Libya is going to do what they've said. We know they've used terror tactics in the past."
Also on investors' minds was demand fundamentals stemming from Japan's disaster. The 8.9-magnitude earthquake that hit northern Japan last Friday triggered a massive tsunami that swept across towns and killed thousands.
Earlier this week, traders dumped commodities on fears that the situation in Japan could trigger a global economic slowdown. But by midweek, oil was staging a comeback. On Thursday, crude prices surged more than 3%.
Friday's commodities downturn also hit natural gas prices, which fell 0.4% to $4.14 per thousand cubic feet.
Natural gas prices had jumped 5% in the previous session on expectations that Japan will look to liquefied natural gas as it sorts out the nuclear power problems that have arisen as a result of the earthquake.
The national average price for a gallon of regular unleaded gasoline fell 0.6 of a cent to $3.540 on Friday, according to motorist group AAA. It was the fourth consecutive decrease.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.60%||3.68%|
|15 yr fixed||2.73%||2.79%|
|30 yr refi||3.64%||3.72%|
|15 yr refi||2.77%||2.82%|
Today's featured rates:
Tesla CEO Elon Musk had said previously that the automaker would become "cash-flow positive" this year. But in a letter to shareholders Wednesday, Musk signaled that won't be the case after all. More
The jobs market is near full employment with 14 million jobs added since early 2010. Gas prices are cheap. Home prices are rising. The stock market is near record highs. So why does everyone think the economy stinks? More
Oakland-based tech startup Clef hosts dinners for the local community in a bid to resist gentrification and unite all types of industries that make up the city. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More