Brent North Sea crude for April delivery fell 36 cents to $112.70. Jim Ritterbusch, head of oil trading advisory firm Ritterbusch & Associates, said rumours that leader Moamer Kadhafi was seeking an exit from Libya's crisis had put some pressure on prices.

OPEC is moving to offset instability in the Middle East, with Saudi Arabia indicating it has raised production and other OPEC members like Nigeria also stepping in, he told Dow Jones Newswires.

"The fact that some OPEC production hikes are reportedly beginning to develop amongst light, sweet producers such as Nigeria is placing more downside pressure on the Brent," he said.

Victor Shum, senior principal of Purvin and Gertz energy consultants in Singapore, told AFP that "some talk from Saudi Arabia that they will develop a blend of light low sulphur crude to help offset Libyan crude oil production... have calmed oil markets somewhat."