Oil drops on OPEC rising production; investors remain jittery (Reuters) (09-03-2011)

SINGAPORE – Oil dropped more on Wednesday after OPEC rose production pushing Asian stocks higher though investors stayed jittery duet to the turmoil in the Mideast.

Benchmark U.S. crude futures dipped to $104.25 a barrel, easing further from a 2- year high hit on Monday, after Kuwait's oil minister said the Organization of the Petroleum Exporting Countries (OPEC) was considering boosting supply to offset disruptions in Libya, where government forces are trying to quash a popular uprising.

Brent crude declined for a third day to stand at $112.34 a barrel at 0710 GMT, more than $7 below a 2- year high of almost $120 reached on February 24.

An official oil output increase by OPEC would signal the group's determination to cap prices, but unrest in the region has fuelled concerns about more supplies being cut off.

The benchmark Nikkei share average closed up 0.6 percent, while the broader Topix gained 0.5 percent.

Gold eased below $1,430 an ounce, falling further from Monday's record high after the drop in oil prices eased some concerns about inflation. Spot gold was at $1,425.20 an ounce.

Source: Reuters