Qaddafi running out of funds, fuel

WASHINGTON – Stalemate in Libya is giving way to building rebel pressure against the regime of Muammar Qaddafi, according to new U.S. intelligence reports, U.S. officials tell The Associated Press.

While the battle is far from won, the officials point to three key indicators: dwindling fuel supplies, a cash crisis and reports of low morale among regime troops.

The assessment comes as French authorities describe overtures from Libyan emissaries reportedly seeking sanctuary for the Libyan leader, who has survived sustained bombing by NATO war planes and U.S. armed drones since mid-March.

While the rebels face their own supply problems, they have captured towns from Nalut to Kikla in Libya’s western Nafusa mountains and cut a key crude oil pipeline that feeds one of the regime’s major refineries in the town of al-Zawiya, the U.S. officials told the AP. They cited U.S. intelligence estimates that fuel shortages could occur within as little as a month.

Qaddafi is also facing a cash crisis after Turkey cut off his access, on July 4, to hundreds of millions in Libyan funds held in a Turkish-Libyan bank, the U.S. officials said. They spoke on condition of anonymity to discuss matters of intelligence.

While the Libyan strongman could not access actual cash, he had been issuing letters of credit to pay his debtors, including fuel importers, the U.S. officials said.