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Singapore - Oil prices dipped in Asia on Wednesday on concerns that a possible spike in US crude inventories signalled declining demand in the world's biggest economy, analysts said.
New York's main contract, West Texas Intermediate crude for delivery in May, shed 64 cents to $106.69 per barrel in the afternoon while Brent North Sea crude for May settlement was down 63 cents at $124.91.
"Oil prices dropped... as investors bet that rising US stockpiles signal fuel demand may falter in the world's biggest crude-consuming nation," said Phillip Futures in a market commentary.
The American Petroleum Institute on Tuesday forecast in a report that US crude inventories rose by 3.6 million barrels last week.
Investors' dim view about US demand was echoed in a closely-watched survey showing American consumers growing more pessimistic about economic conditions.
The Conference Board said its consumer confidence index dipped in March, in line with analysts' expectations after a surge in February.
Meanwhile reports of a possible release of US strategic petroleum reserves also weighed on prices, Phillip Futures said.
Industrialised nations including the United States, Britain and France have been mulling a plan to release part of their crude reserves to counter rising prices brought on by fears about a supply disruption in the Middle East.
