Traders said oil prices fell by more than $2 a barrel in late Thursday activity on rumors Libyan leader Moammar Gadhafi had been shot.

There was no immediate indication of where the rumor had originated or any news report to substantiate it.

Traders also cited earlier reports that Saudi Arabia was in talks with European refiners to make up for the loss of Libyan crude and rumors of a possible release of U.S. emergency oil stockpiles as weighing on oil prices.