Oil prices fell Monday, ahead of a meeting scheduled for later this week between major crude producers, where a decision is expected on whether cuts will be extended.
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The Organization of the Petroleum Exporting Countries and producers including Russia are set to meet Thursday to discuss whether to extend cuts beyond their expiration in March. Russia's position is considered the wild card to the outcome.
The countries have cut output since January in an effort to drain a glut in supply.
U.S. crude futures tumbled $1.30, or 2.21%, to $57.65 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 59 cents, or 0.92%, to $53.27 a barrel on ICE Futures Europe.
Prices surged at the end of last week amid light volumes in a shortened holiday week, but the market began to deflate Monday amid uncertainty about OPEC's upcoming meeting.
"You're seeing a round of profit-taking after a very thin and slow week last week," said Donald Morton, senior vice president at Herbert J. Sims & Co., who oversees an energy trading desk.
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Uncertainty about cooperation between OPEC and Russia is tempering investors' enthusiasm, said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas.
Saudi Arabia supports an extension.
"Russia has been dithering both on duration and even hinting at times the possibility of delaying a decision until next year when we have a better assessment of market fundaments," Mr. Tchilinguirian said.
Last week, Reuters reported that Russia's economy minister, Maxim Oreshkin, said the country's economic growth had been hurt by the production cut agreement.
Oil prices have surged to more than two-year highs in recent months, mainly on rising geopolitical tensions in key oil-producing countries, including Iraq and Saudi Arabia, along with expectations of an extension to the production cuts.
Mr. Tchilinguirian said that as the oil price rises, Russia's currency appreciates, which reduces the external revenues of Russia in ruble terms, while there is also lower investment in a large segment of the economy.
Russia had agreed to cut around 300,000 barrels a day of production as part of the deal with OPEC.
"Anything other than an extension of the agreement would come as a big surprise and would trigger a massive price slide," Commerzbank said in a daily note.
"There would need to be a drop of more than 10% from current levels before we could say the bullish trend had been broken, but if OPEC doesn't produce a production cut, this week may mark the start of that move," the analysts said.
Investors continued to monitor disruption to the Keystone pipeline carrying Canadian crude to the U.S. after a leak earlier this month. It is expected the reduced flow could cause a further fall in U.S. stocks in the Energy Information Administration's weekly update Wednesday.
Gasoline futures fell 0.92 cents, or 0.51%, to $1.7788 a gallon. Diesel futures fell 1.76 cents, or 0.9%, to $1.9353 a gallon.
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(END) Dow Jones Newswires
November 27, 2017 11:27 ET (16:27 GMT)