Investing.com - Crude oil prices fell sharply in Asia on Monday as investors took profits on recent gains and looked ahead to a possible output response from U.S. shale producers.
U.S. crude oil dropped 1.12% to $51.10 a barrel on the New York Mercantile Exchange.
Last week, oil prices rose for a third day on Friday, settling above $51 a barrel after the Organization of the Petroleum Exporting Countries reached an agreement to cut output for the first time in eight years in order to reduce a global supply glut.
Global benchmark Brent futures were at $54.43 a barrel, up 49 cents or 0.91% on London’s ICE Futures Exchange and rose nearly 15% for the week, the biggest weekly percentage gain since early 2009.
Oil prices surged after OPEC agreed on its first production cut since 2008, aimed at reining in massive oversupply that has seen prices more than halve since mid-2014.
The deal will see output cut by 1.2 million bpd from January 2017. The agreement will be reassessed after six months with an option to extend for another six months.
The 14-member cartel is responsible for a third of global oil production, or 33.6 million barrels per day.
The agreement also included coordinated action with non-OPEC members, who are expected to decrease production by 600,000 barrels a day.
Russia has said it will cut production by 300,000 barrels a day.
But analysts said that the cuts are likely to cause other producers, especially U.S. shale drillers, to increase output.
Analysts are also doubtful over how the agreement will be enforced, as OPEC has no authority to make its members comply.