Oil mixed in Asia ahead of US inventory report

Oil prices were mixed in Asia on Wednesday as caution set into the market ahead of a US crude inventory report, analysts said.

New York's main contract, light sweet crude for delivery in May dropped 30 cents to $93.90 a barrel in the afternoon and Brent North Sea crude for May gained 14 cents to $106.37.

"Cautious dealers are repositioning themselves for the US inventory report after a rally in prices," Ric Spooner, chief market analyst at CMC Markets in Sydney, told AFP. "The market has a 'wait-and-see' attitude in the meantime."

Analysts expect the US Department of Energy's weekly petroleum stockpiles report to show another increase in supplies, which would mirror weaker demand in the world's biggest economy and put downward pressure on prices.

The cost of oil had risen at the start of the week on strong Japanese equities, a subdued inflation report from China and a weaker dollar.

China on Tuesday said the consumer price index rose 2.1 percent in March, well below the 10-month-high of 3.2 percent in February and below the 2.4 percent CPI reading forecast by analysts.

The slowdown in inflation eased investor concerns that China -- the world's biggest energy consumer -- would want to tighten monetary policy.