Oil prices retreat on profit-taking

Oil prices dropped on profit- taking Monday after making considerable gains last week.

Oil prices rose for three consecutive trading days last week after the Federal Reserve announced plans to cut its 85-billion-U. S.-dollar monthly bond purchases by 10 billion dollars starting in January.

The Fed decision was seen as a vote of confidence in the economy, which was showing signs of improvement.

The Commerce Department said on Friday that U.S. real gross domestic product grew at a 4.1 percent annual rate in the third quarter, the fastest pace since the fourth quarter of 2011 and also an acceleration from the 3.6 percent pace reported earlier this month.

Traders, however, believed that the oil markets need a pause after a good run. Crude oil slipped Monday even after upbeat consumer spending data was released.

Personal consumption expenditures increased 0.5 percent in November, marking the largest increase in five months, while personal income edged up 0.2 percent, the Commerce Department said on Monday.

It was the seventh straight month of increases for consumer spending and matched economists' forecast.

Light, sweet crude for February delivery lost 41 cents to settle at 98.91 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for February delivery moved down 21 cents to close at 111.56 dollars a barrel.