Oil prices have increased following renewed speculation that the US could increase interest rates later this year, which has also led to a rise in dollar value.

Brent futures stood at $48.33 per barrel up just 16 cents, while the US West Texas Intermediate (WTI) futures were at $45.27 a barrel, a rise of 36 cents, Reuters reported.

An increase in US dollar index by 0.5% also dragged oil prices, following suggestion by US Federal Reserve Chair Janet Yellen that the central bank may raise interest rates soon.

"S&P analysts said that there has not been a fall in production even due to a reduction in capital spending of 30%-40% this year by many US exploration and production companies."

Speaking at the University of Massachusetts, Yellen said that the rate hike would likely be appropriate even though the decision hinges on economic data.

S&P analysts said that there has not been a fall in production even due to a reduction in capital spending of 30%-40% this year by many US exploration and production companies.

Due to a decline in US rig count and a cut in crude inventories, oil prices increased by over 25% in late-August, hinting a tightening in the North American market.

Japan has reported a drop in its core consumer prices, which said to be first such drop since the country announced its stimulus programme more than two years ago.