Benchmark Brent crude futures <LCOc1> fell by 37 cents, or 0.73 percent, from their last close to $50.43 per barrel by 0626 GMT.
In the United States, West Texas Intermediate (WTI) crude futures <CLc1> were down 45 cents, or 0.94 percent, at $47.52 a barrel.
Traders said that prices were pulled down by rising U.S. drilling and production as well as over uncertainty whether the Organization of the Petroleum Exporting Countries (OPEC) and other producers, who met in Kuwait over the weekend, would extend output cuts beyond the middle of the year.
"There is currently no shortage of crude oil...the fact that shale oil is going to burgeon is also painfully evident," said Sukrit Vijayakar, director of energy consultancy Trifecta. Vijayakar said there also "seems to be a difficulty in reaching consensus on extending the production cuts".
Traders said that rising U.S. drilling activity and oil production were contributing to financial traders reducing their long positions in crude futures to the lowest level since early December.
Since mid-2016, U.S. oil production has risen by 700,000 barrels per day (bpd), or 8.3 percent, to 9.13 million bpd, government data shows <C-OUT-T-EIA>.
U.S. bank Goldman Sachs said that should the rig count stay at current levels and the impact of previously closed rigs returning to production was considered, then U.S. oil production would rise by 235,000 bpd between the fourth quarter of 2016 and the first half of 2017.
Because of soaring U.S. output and the cuts by OPEC, the discount of U.S. WTI crude prices to international Brent crude <CL-LCO1=R> has grown to around $2.90 per barrel, heading for its widest close since late 2015, encouraging more sales of U.S. oil to Asia to replace cuts in Middle East production.
Despite the ongoing fuel supply overhang and rising U.S. shale output, Goldman Sachs said that global oil markets were slowly rebalancing, largely due to strong demand growth.
"While the shale production rebound has surprised to the upside, it will be offset in our view by the high compliance to the production cuts through 1H17 and most importantly, strong demand levels," the bank said.
"We believe that the rebalancing of the oil market is in fact making progress," it said, adding that an OPEC-led extension of the production cut was therefore not needed.
(Reporting by Henning Gloystein; Editing by Richard Pullin and Kenneth Maxwell)
By Henning Gloystein