Oil falls as investors cash in on OPEC deal rally, dollar rises

By Karolin Schaps

LONDON (Reuters) - Oil prices fell on Friday on a stronger dollar and as investors cashed in on a 6-percent rise in just one day after OPEC members agreed to reduce output for the first time in eight years to stifle a two-year price slide.

Global benchmark Brent crude futures were down $1.03 at $48.21 a barrel by 1006 GMT, but still 4.5 percent higher than before the OPEC agreement on Wednesday.

U.S. crude was down 66 cents at $47.17 a barrel, around 5 percent higher than before the OPEC announcement.

The dollar was up against a basket of currencies, making it more expensive for investors to hold dollar-denominated commodities like oil.

"We're seeing some profit-taking because it is a long time until the next OPEC meeting in November when individual quotas have to follow," said Frank Klumpp, oil analyst at Stuttgart-based Landesbank Baden-Wuerttemberg.

The Organization of the Petroleum Exporting Countries (OPEC) agreed on Wednesday to cut output to 32.5-33.0 million barrels per day (bpd) from around 33.5 million bpd, estimated by Reuters to be the output level in August.

The details, including the quotas for each member and the implementation data, will be finalised at OPEC's policy meeting in November.

"The group surprised us in Algiers and we cannot rule out that they will surprise us again," said analysts at BMI Research.

"However, we maintain our view that a collective cut will have little impact on a fundamental level."

A persistent oil supply glut brought prices from mid-2014 highs above $100 a barrel to below $50 today, prompting the oil producers' group to find agreement on limiting output.

The United States, now the world's biggest oil producer but not a member of OPEC, said it had little faith in the deal leading to higher prices in the long term.

Amos Hochstein, the U.S. energy envoy, said in a Reuters interview the deal will either lead to higher U.S. production and trigger another price fall or allow U.S. producers to expand market share.

Investors are bracing for further oil price swings ahead of the November meeting.

"We are likely to see some volatility going into November's meeting," said Jade Fu, investment manager at Heartwood Investment Management.

"We continue to maintain reasonable exposure to energy through commodity-related sectors, such as U.S. high yield and private equity."

(Additional reporting by Keith Wallis in Singapore and Osamu Tsukimori in Tokyo; Editing by Adrian Croft)