The oil markets began the week on the back foot, with prices falling amid rising drilling activity in the USA as production from Opec countries remained steady.
Brent for May settlement declined as much as 75 cents, or 1.5 percent, to $51.01 a barrel on the London-based ICE Futures Europe exchange. US West Texas Intermediate (WTI) crude futures slipped 48 cents, or 0.98 per cent, to US$48.30 a barrel.
"This unwinding of position is both a cause and reflection of the big fall in crude oil prices when the cracks in the OPEC/non-OPEC deal emerged and when it seems like it became evident shale oil is back and the new swing player", said Greg McKenna, chief market strategist at brokerage AxiTrader.
Following the lifting of sanctions imposed against Iran's nuclear program, business has been gradually returning to the country with many large oil companies importing crude oil of Iranian origin.
The price action would be more bearish on a move below the 38.2% of the move up from the June 2016 low at the $47.60.
United States oil output has risen to over 9.1 million bpd from below 8.5 million bpd in June past year.
"The continued increase in United States oil rigs adds to the bearish sentiment", he added.
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The total rig count is still 978 from its peak before the impact of the oil crash hit drillers, but that gap continued to shrink last week.
Reacting to the oversupply, traders cut net long positions in oil, the biggest cut on record, according to the US Commodity Futures Trading Commission (CFTC) data compiled by Reuters.
As populist candidates and parties continue to perform well in elections across Europe and the US, the impact this shift will have on the workings of the world economy still remain unclear.
The Opec and some non-Opec producers cut production from January 1 to reduce record stocks of crude.
Elsewhere on Nymex, gasoline futures for April declined 0.8 cents, or 0.5%, to $1.585 a gallon, while April heating oil dipped 1.3 cents to $1.495 a gallon.
However, most of the investors that had expected oil prices to book decent gains in response to the output cuts would have had their hopes dashed in the last couple of weeks. The deal was the first of its kind in eight years and included nearly a dozen outsider nations that agreed to cut an additional 600,000 barrels of production.