Oil dropped below $58 a barrel as investors weighed an increase in U.S. oil drilling rigs against OPEC's promise to extend output cuts through the end of next year, according to Bloomberg.
Futures fell as much as 0.9 percent in New York after adding 1.7 percent Friday, Bloomberg said.
Read alsoBloomberg: OPEC and Russia extend output cuts, strengthening oil allianceOPEC and its allies including Russia last week agreed to keep their supply cuts in place and beefed up the extension with the inclusion of Nigeria and Libya. Executives from three of the biggest independent U.S. drillers said while they won't increase activity just because prices rise after OPEC agreed to prolong curbs, they will continue to grow.
Oil has advanced for three consecutive months through November amid optimism that output cuts by Organization of Petroleum Exporting Countries and its partners are helping to balance the market. Drillers targeting crude in the U.S. added two rigs to 749 last week, the highest level since late September, according to Baker Hughes Inc.
"Even though adding Nigeria and Libya is a positive sign, OPEC has basically played all its cards after deciding to extend production curbs through next year," Will Yun, a commodities analyst at Hyundai Futures Corp., said by phone. "As long as U.S. shale suppliers exist, it will be hard to see further gains in oil prices from now on."
West Texas Intermediate for January delivery was at $57.95 a barrel on the New York Mercantile Exchange at 3:54 p.m. in Seoul, down 41 cents. The contract gained 96 cents to settle at $58.36 on Friday. Total volume traded was about 17 percent below the 100-day average.
Brent for February settlement dropped 30 cents to $63.43 a barrel on the London-based ICE Futures Europe exchange. Prices added $1.10, or 1.8 percent, to close at $63.73 on Friday. The global benchmark crude was at a premium of $5.45 to February WTI.