Investing.com - Crude prices eased more in Asia on Monday as investors took profits on recent gains and showed a more cautious view on prospects that major producers would agree to an output freeze in the coming month and noted a stronger dollar on remarks from Federal Reserve Vice Chair Stanley Fischer.
On the New York Mercantile Exchange, crude oil for delivery in September fell 0.63% to $48.80 a barrel. On the ICE Futures Exchange in London, Brent oil for October delivery dropped 1.55% to $50.09 a barrel.
On Tuesday, the American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.
Last week, oil futures rose for the seventh straight session on Friday, remaining in bull market territory, as investors continued to bid up prices amid speculation major oil producers, led by Saudi Arabia and Russia, are reconsidering a collective production freeze in an effort to boost the market.
Crude pared some gains after a report showed the number of U.S. oil rigs rose for the eighth week in a row, underling concerns over a global supply glut.
Crude futures have now surged almost $10 a barrel, or nearly 25% from their Aug. 2 lows, officially charging into a bull market, as the prospect of an output freeze by major producers sparked a massive rally.
The market started to recover a little over two weeks ago, when Saudi Arabia’s energy minister said the country would work with other oil producers to stabilize prices at an informal OPEC meeting in Algeria next month.
The rally received additional support after Russia expressed willingness to participate in those talks, which some say could lead to a pact to freeze production levels.
However, market analysts remained skeptical that the meeting would result in any concrete actions.
An attempt to jointly freeze production levels earlier this year failed after Saudi Arabia backed out over Iran's refusal to take part of the initiative, underscoring the difficulty for political rivals to forge consensus.
Despite recent gains, indications of an ongoing recovery in U.S. drilling activity combined with elevated stocks of fuel products around the world is expected to keep prices under pressure in the near-term.
According to oilfield services provider Baker Hughes, the number of rigs drilling for oil in the U.S. last week increased by 10 to 406, the eighth consecutive weekly rise and the 11th increase in 12 weeks.
Some analysts have warned that the current rally in prices could be self-defeating, as it encourages U.S. shale producers to drill more, underlining concerns over a global supply glut.