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Singapore - Oil dipped in Asian trade on Monday as traders locked in profits after gains last week, but analysts said prices could still go higher.
New York's main contract, light sweet crude for delivery in May fell 78 cents to $108.88 a barrel in the afternoon, while Brent North Sea crude for June eased 49c to $122.96.
"After three days of gains, markets are looking to lock in some of the profits," Ong Yi Ling, an investment analyst for Phillip Futures in Singapore, told AFP, with a weaker dollar also supporting prices.
As oil is priced in dollars, a weaker greenback makes it cheaper for holders of stronger currencies, perking up demand.
"The dollar could still be weak because of the easing monetary policy by the Federal Reserve," Ong said.
The market is also monitoring events in Libya and the Middle East for their possible impact on oil supplies, other analysts said.
In Libya, forces loyal to dictator Muammar Gaddafi bombarded rebels west of Ajdabiya on Sunday, forcing hundreds of residents and some fighters to flee the crossroads town, as a refugee rescue operation in the city of Misrata loomed.
The intense pounding of Ajdabiya came a day after at least eight people were killed and 27 wounded as pro-Kadhafi forces fired rockets at rebel positions there.
Unrest in the Middle East and North Africa region, where uprisings have already toppled the leaders of Tunisia and Egypt, has been a key factor in driving prices higher.
On Monday, Opec secretary general Abdullah El-Badri said the oil cartel was "concerned" at the high crude prices amid fears of lower supply, although he added that markets are adequately stocked.
"We see that there is a $15-20 premium risk at this time," Badri told reporters in Kuwait.
He was speaking ahead of a roundtable meeting for Asian energy ministers who are expected to discuss the impact of oil prices on the economy.
On Sunday, Saudi Arabia assured that it was ready to supply crude as demanded by customers, yet analysts said this was unlikely to calm investors.
"Saudi Arabia will supply whatever customers ask for," Saudi Oil Minister Ali al-Naimi told reporters on arrival in Kuwait to attend the meeting.
But he acknowledged that the kingdom's oil output fell to 8.29 million barrels per day in March from as high as 9.1 million in February.
The minister declined to comment on what is considered a "fair" price for oil.
