U.S. crude oil price fell on Thursday from its two and half year high as efforts for Libya's peace eased investors worries.

On Thursday, a spokesman for Venezuelan President Hugo Chavez said the Libyan government has accepted Venezuela's plan for an international commission to seek a solution to its turmoil. The statement came after Arab League Secretary-General Amr Moussa earlier said the plan was "under consideration."

This gave oil traders and investors hope for a solution to the Libyan crisis, so the concerns about long-term supply disruption have been eased.

And some analysts thought the oil market is now overbought after two days of strong gains. So the retreat on Thursday was also a technical indicator.

Because of continuing violence, the OPEC member state Libya's output has fallen 850,000 to 1 million barrels per day according to the International Energy Agency, which weighted heavily in the oil markets and sent oil prices surge in the past two days.

Light, sweet crude for April delivery dropped 32 cents to settle at 101.91 dollars a barrel on the New York Mercantile Exchange. In London, Brent crude also fell 1.56 dollars to 114.79 dollars a barrel.