GADDAFI’S FORCES HAVE PUSHED rebels from a key oil town using warships, tanks and planes, and are closing in on the opposition-held eastern half of the country.

US Secretary of State Hillary Clinton is due to meet with rebel leaders in Paris today as insurgents continue to call for the UN to impose a no-fly zone on Libya.

Loosely-organised rebel fighters said yesterday that they were fleeing the oil town Breda under heavy attack and later a spokesperson for Gaddafi’s military said they had seized the town.

The AP says it is impossible to confirm either side’s account because it has become too dangerous for reporters to operate in the contested area.

Ajdabiya is the only other major city between Gaddafi’s forces and the rebel headquarters in the eastern city Benghazi. Doctors and wounded people are being evacuated from Ajdabiya in preparation for a battle there as Gaddafi’s forces push on towards Benghazi.

Army spokesperson Milad Hussein said the military doesn’t foresee any serious problems in driving rebels from Benghazi:

Benghazi doesn’t deserve a full-scale military action. They are a group of rats and vermin and as soon as we go in, they will raise their hands and surrender.

Libya’s de facto oil minister said yesterday that the country’s crude oil production had fallen “drastically”. Production at Libya’s oil fields had either halted or sharply dropped, bringing overall output to about a third of its usual 1.6m barrels a day.

Oil prices have dropped below $100 a barrel after rising sharply during recent unrest in Egypt and Libya. The price has now fallen because demand in Japan is expected to drop in the wake of Friday’s earthquake and tsunami.

- AP