U.S. crude was down $1.56 or 3 percent at $50.11. It's the highest level in the last 30 years. Oil's loss also comes as "we've seen some decent dollar strength".
Futures fell as much as 3.1 percent in NY to the lowest level in more than a week.
"The demand narrative was going to be called into question for the fall season, because it naturally declines", said John Kilduff, founding partner at Again Capital.
"It's coming out that OPEC's oil output rose last month, another rise in the rig count".
The rally was driven by mounting signs that a three-year supply glut is easing, helped by a production cut deal among global producers led by the Organization of the Petroleum Exporting Countries.
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Brent crude LCOc1 fell 26 cents to $55.86 a barrel after slipping 67 cents in the previous session, while the USA crude CLc1 dropped 15 cents to $50.43, reported Reuters. A report emailed Monday from RBC Capital Markets said political trouble brewing in Venezuela, the fallout from the Kurdish referendum, and questions over the status of the Iranian nuclear deal could all point to trouble on the oil market horizon.
U.S. crude oil production inched up last week to reach 9.55 million barrels a day slightly under its 2015 peak, and Baker Hughes said on Friday that the number of rigs looking for oil in the United States rose for the first time in a month to as the impact of hurricanes Irma and Harvey continue to fade.
EIA further went on to say gasoline stocks rose by 1.6 million barrels, compared with analyst expectations for a 1.1-million-barrel gain.
Crude oil prices are diving deep into negative territory in early Monday trading. US crude oil more often than not falls in the final three months of the year, according to a study performed by CNBC using hedge fund analytics tool Kensho. While demand has yet to catch up to elevated supplies, rebounding economies in Europe and steady economic growth in the US could at least keep oil prices steady around current levels in the second half of 2017.
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