Oil prices rose to near $105 a barrel in Asia on Thursday, following reports that crude production in Libya has dropped more than earlier estimate, as fresh battles between the forces loyal to Moammar Gadhafi and rebels led to damage of key oil infrastructure in the country.

Benchmark crude for April delivery traded at $104.79, up 41 cents at midday Singapore time on the New York Mercantile Exchange. The contract closed at $104.38 on Wednesday, losing 64 cents.

Brent crude traded at $116.23 a barrel, up 29 cents on the ICE futures exchange in London.

Intense fighting on Wednesday between rebels and Ghadhafi’s loyalists led to damage of key oil installation in Ras Lanouf, AFP reported.

Libya’s oil output has dropped by more-than two thirds since the rebellion against Gadhafi began in February, said Shukri Ghanem, chief of National Oil Corp. on Wednesday. Oil production has been reduced to just 500,000 barrels per day from 1.6 million barrels.