NEW YORK, United States — Oil continued to drop yesterday on mixed economic news and the possibility that Saudi Arabia and other OPEC countries will step up production.

Benchmark crude for March delivery lost US$1.68 to settle at US$86.19 a barrel on the New York Mercantile Exchange.

Oil hasn’t been below US$87 since Dec1. It has fallen more than four per cent since Thursday, when it was approaching US$92 a barrel. About half of the drop happened in the last two days.

One of the main reasons for the decline this week is comments on Monday by the Saudi oil minister, which many analysts and investors took to mean that Saudi Arabia, the world’s biggest oil producer, thought oil had gotten too expensive and could threaten global economic growth. He seemed to imply that the Saudis and other members of the Organization of Petroleum Exporting Countries could raise production to bring down the price of oil.

Goldman Sachs analysts think it’s possible that OPEC has already stepped up production. They say global demand increased in December, but oil supplies did not appear to decline at the same pace.

“It would suggest that OPEC has started to bring its spare capacity back to the market earlier than we anticipated,” Goldman Sachs wrote in a note to investors.

The Energy Department releases its weekly report on U.S. crude oil supplies on Wednesday. Analysts expect inventories to increase by 1.7 million barrels, according to Platts, the energy information arm of McGraw-Hill Cos.

They also expect the report to show that refineries operated at a slower rate than the week before. “The reduced demand for crude oil that comes with refinery maintenance also has played a role in pulling prices back recently,” energy consultants Cameron Hanover said.