Crude prices have dropped after initially rising more than one per cent early this morning.
Investors are worried an output cut led by the Organisation of the Petroleum Exporting Countries (Opec) will not curb the global supply glut. According to Friday's Baker Hughes rig count, the number of US oil rigs in operation is at its highest point in more than three years.
Brent crude, the global benchmark, fell 0.81 per cent to $45.17 per barrel, erasing gains of more than one per cent from its previous close earlier in the day.
US benchmark West Texas Intermediate (WTI) prices were trading 0.37 per cent lower at $42.85 per barrel this afternoon.
"Trend and momentum indicators remain comfortably negative," said Ipek Ozkardeskaya, senior market analyst at London Capital Group, after this morning's bounce.
"We saw this continued big rise in oil rigs last week and in our view we don’t need a single additional rig for the next 12 months in the US space if we look at balance for 2018," SEB strategist Bjarne Schieldrop told Reuters.
Both benchmarks' prices have fallen significantly since Opec and non-Opec nations agreed to extend a deal to cut production until March 2018 - Brent traded around $54 per barrel while WTI was priced at $51 per barrel in the days before the meeting.