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Oil prices slipped on Monday on worries about oversupply in North America, with Brent futures dropping below $60 a barrel and US contracts hovering around $50.30.
After an initial rise on Monday, along with global markets on optimism that another euro zone crisis over Greek debt had been averted for now, prices began dipping as analysts said crude markets remained oversupplied, especially in the United States, where inventories are at record highs.
"We expect oil's rally to peter out as weakening fundamentals overwhelm the recent rally," said ANZ Bank in a note on Monday.
Brent crude was trading 28 cents lower at $59.94 at 0929 GMT. Benchmark US West Texas Intermediate(WTI) crude April futures were trading down 3 cents at $50.31 a barrel.
WTI's March futures settled at $50.34 a barrel on Friday, expiring as the front-month contract.
"Near-term topping signals for WTI crude oil endorse our expectation of further choppy consolidation," said Barclays in a note. "A move below nearby support in the $48.20 area would signal a squeeze towards the range lows at $44.37 where we would look for signs of a base."
Oil prices more than halved between June and January, with Brent front-month futures reaching a low of $45.19 a barrel on January 13.
Since then, prices have picked up as Brent futures jumped to touch $63 a barrel last week as traders closed longstanding short positions in reaction to a falling US rig count.
Morgan Stanley warned US crude stocks were set to build through May.
"Despite optimism about the large drop in the US rig count in recent weeks, the pace of decline has been decelerating," it said.
