SINGAPORE: Oil prices were down in Asia on Thursday as the dollar strengthened and amid market speculation that Saudi Arabian crude production could increase in the coming months, analysts said.
New York's main contract, light sweet crude for delivery in April, shed 84 cents to $94.38 a barrel in the afternoon and Brent North Sea crude for delivery in April dropped 58 cents to $115.02.
The retreat in oil prices was driven by "prospects of increasing supply out of Saudi Arabia in the coming months", said Sanjeev Gupta, who heads the Asia-Pacific oil and gas practice at Ernst & Young.
Market chatter suggested that Saudi Arabia was planning to increase production to meet rising demand from countries such as China.
An increase in production usually puts a downward pressure on prices.
Another factor was the stronger US dollar, which rose Wednesday after minutes of the latest US Federal Reserve policy meeting were released.
Minutes of the January 29-30 meeting suggested the central bank could begin tightening its monetary policy even before the US labour market picks up.
"Such belief has caused the dollar to rally against the euro, making commodities less desirable," Phillip Futures said in a market commentary.
