Investing.com - Oil prices were modestly lower in quiet European trade on Monday, as a broadly stronger U.S. dollar prompted market players to lock in gains from a recent rally which took prices above the key $50-level.
Both Brent and West Texas Intermediate oil futures cracked $50 late last week for the first time since October as traders eyed supply disruptions in Nigeria, France, Canada and Venezuela.
The U.S. dollar climbed to its highest level in more than two months against a basket of major currencies on Monday after comments by Federal Reserve Chair Janet Yellen increased the likelihood of a near-term U.S. interest rate hike.
In remarks made during an appearance at Harvard University Friday afternoon, Federal Reserve Chair Janet Yellen said a rate hike in the coming months "would be appropriate," if the economy and labor market continue to improve.
A stronger greenback makes dollar-priced commodities more expensive for holders of other currencies.
Crude oil for July delivery on the New York Mercantile Exchange shed 14 cents, or 0.28%, to trade at $49.19 a barrel by 07:52GMT, or 3:52AM ET.
Trading volumes are expected to be thin as the London and New York markets are closed for a public holiday.
Nymex prices rallied to $50.21 last Thursday, the most since October 9. U.S. crude futures are up nearly 80% since falling to 13-year lows at $26.05 on February 11 as a decline in U.S. shale production boosted sentiment.
According to oilfield services provider Baker Hughes, the number of rigs drilling for oil in the U.S. fell by two to 316 in the latest reporting week, keeping up a broad trend of declines.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for August delivery dipped 25 cents, or 0.5%, to trade at $49.70 a barrel.
Last Thursday, Brent prices jumped to $50.96, a level not seen since October 12, as unplanned supply disruptions in Africa and North America eased concerns over a global glut.
Brent futures prices are up by roughly 85% since briefly dropping below $30 a barrel in mid-February.
Market players will be looking ahead to the Organization of Petroleum Exporting Countries meeting in Vienna on Thursday. Most market analysts expect the oil cartel to keep their production quota unchanged amid rising prices.
The oil cartel’s most recent meeting in Qatar in April ended without agreement to freeze output at current levels due to Saudi Arabia's insistence that Iran be part of the agreement.
Meanwhile, Brent's premium to the WTI crude contract stood at 51 cents a barrel, compared to a gap of 62 cents by close of trade on Friday.