Oil prices declined on Monday as last week's rally spurred profit taking.

U.S. rigs classified as drilling for oil reduced five to 763 in the August 18 week, according to the oilfield services firm Baker Hughes on Friday.

In addition, U.S. crude inventories fell by 8.95 million barrels in the August 11 week, nearly three times market expectations for a decrease of 3.1 million barrels, according to report released by the U.S. Energy Information Administration last week.

Analysts said data signaled the oil market was starting to rebalance and supported oil prices last week. Oil prices on Monday were pulled back by profit taking.

The West Texas Intermediate for September Delivery lost 1.14 dollar to settle at 47.37 dollars a barrel on the New York Mercantile Exchange, while Brent crude for October delivery erased 1.06 dollar to close at 51.66 dollars a barrel on the London ICE Futures Exchange.