Oil loses 1 percent Monday, pressured by stronger greenback and rise in Libyan output

Oil dropped more than 1 percent on Monday, with Brent slipping to around $62 a barrel, depressed by a stronger dollar and a rise in Libyan crude output.

A rate cut in China pressured the Chinese yuan and hit emerging Asian currencies, but pushed up the U.S. dollar to an 11-year high.

Brent crude reached a low of $61.78 a barrel and was at $62.08 by 0910 GMT (4.10 a.m. EST), down 50 cents. Front-month Brent jumped 18 percent in February, the largest monthly rise since May 2009. U.S. crude was down 55 cents to $49.21 a barrel.

Disruption to oil supplies from members of the Organization of the Petroleum Exporting Countries (OPEC) has helped underpin crude with lower output from Libya and Iraq in the first couple of months of this year.

However, output from several OPEC countries may be recovering. According to officials, Libya's oil production has now recovered to more than 400,000 barrels per day (bpd).

Particularly, U.S. oil markets remain weak with a U.S. refinery strike denting demand for crude and domestic production still increasing, despite reports that the number of exploration rigs operating in North America is falling due to lower oil prices.

The number of oil rigs dropped by 33 last week to 986, the smallest drop this year, a survey showed.

These diverging trends helped stretch the premium for Brent over U.S. crude to its widest since January 2014 on Friday at $13 a barrel.

According to Reuters market analyst Wang Tao, technical charts point to a further widening of the spread to $16.98 in the next three months.

"While we expect Brent prices to recover eventually, with our 2016 forecast at $60/bbl, we do not expect a V-shaped recovery from here," Barclays analysts said in a note.

"Prices will have to move lower first, to create a meaningful impact on supply reductions, before the market balances in the first half of the year."