Oil prices retreated from their highest levels in more than a month on Monday as investors took profits after several days of sharp gains and oil markets remained over-supplied despite talk of stronger demand next year.
Oil has been on a roller-coaster ride over the last few weeks, recovering from six-year lows. North Sea Brent crude dropped to almost $42 a barrel in August, from a peak above $115 in June 2014, but then rallied back to an intraday high of $54.05 on Friday.
Evidence that oil producers are reducing output in response to low prices has helped make sentiment more positive and many traders and analysts now expect prices to be higher next year as global fuel demand recovers.
But the upswing appears to have been too fast, analysts say, adding that heavy technical selling had set in.
"The recent rise has left room for profit-taking," said Carsten Fritsch, senior oil analyst at Germany's Commerzbank. "Sizeable net long positions have made the market vulnerable to a sell-off."