(Reuters) - Oil fell more than $1 early on Thursday as the dollar rose after comments by U.S. Federal Reserve Chairman Ben Bernanke, and as news of a 6.8-magnitude earthquake in northeast Japan weighed on prices.
Brent LCOc1 fell $1.05 a barrel to $113.16 a barrel by 0005 GMT. U.S. oil CLc1 slipped $1.18 a barrel to $94.23.
The dollar gained 0.3 percent versus a basket of currencies .
The U.S. Geological Survey reported a 6.8 magnitude earthquake off the coast of Honshu, Japan, 85 miles (136 kilometers) southeast of Hachinohe at 21:50 GMT.
FUNDAMENTALS
* Oil rose 3 percent on Wednesday, boosted by data showing a drop in U.S. crude and gasoline stockpiles as the market weighed comments from the U.S. Federal Reserve.
ICE Brent crude for August LCOc1 settled at $114.21 a barrel, gaining $3.26. U.S. crude CLc1 gained $1.24 to settle at $95.41 a barrel.
* The Federal Reserve on Wednesday cut its forecasts for U.S. economic growth, but offered no hint of further monetary support, saying the recovery should gradually pick up heading into 2012.
* Most economists from top financial institutions expect the Federal Reserve to hold interest rates near zero through the middle of next year while the central bank grapples with high unemployment and a slowdown in growth, according to a Reuters poll.
* European leaders will try to convince Greeks and financial markets when they meet on Thursday and Friday that they have a workable plan to help Athens avoid a debt default and return to financial stability.
* A split has opened within the NATO-led air campaign against Libyan leader Muammar Gaddafi, with France and Britain rejecting an Italian call for a halt to military action to allow aid access.
* Bahrain sentenced eight prominent Shi'ite Muslim activists and opposition leaders to life in prison on Wednesday on charges of plotting a coup during protests in the Gulf island kingdom earlier this year.
MARKETS NEWS
* Sterling sagged to three-month lows in Asia on Thursday after the Bank of England raised the prospect of offering more stimulus, in contrast to the U.S. Federal Reserve, which gave no hint of further monetary support.
* U.S. stocks dropped on Wednesday after the Federal Reserve cut its forecasts for U.S. economic growth this year and next, without hinting at further plans for stimulus.
* The Nikkei average is set to fall on Thursday, hit by losses in Wall Street, giving up some of the gains racked up the previous day on short-covering as the Fed cut its forecasts.
DATA/EVENTS
* The following data is expected on Thursday:
- 0658 France Markit/CDAF Mfg FlashP P Jun 2011
- 0728 Germany Markit/BME MFG Flash PMI Jun 2011
- 0758 EZ Markit Mfg flash PMI Jun 2011
- 1230 U.S. Unemployment claims Weekly
- 1230 U.S. USDA export sales Weekly
- 1430 U.S. EIA natural gas stocks Weekly
RELATED NEWS > U.S. stocks fell, government debt prices were flat and oil rose after the Federal Reserve cut its forecast for U.S. economic growth but gave no hint of further stimulus plans.