Oil prices rallied last week after the OPEC agreed to cut output for the first time since 2008. However, investors still doubtful if the deal would help rebalance the oil markets in the long-run. Oil futures slipped on Monday, retracing some of last week’s sharp rally.

Shale producers are seen increasing oil output in response to higher prices, which eventually could end up forcing OPEC members to override the output cut deal. The Baker Hughes data released on Friday last week showed drillers added three oil rigs in the week to Dec. 2, bringing the total count up to 477, the most since January, but still below the 545 rigs seen a year ago.

Oil prices at both sides of the Atlantic dropped almost 1 percent in early Asian trade on Monday as investors remain skeptical about the long-term ramifications of the OPEC deal. After an initial slide, black gold recovered losses, gaining traction during European session amid renewed risk-on wave.

Markets reversed initial bearish reaction over Italy's 'NO' vote to Prime Minister Matteo Renzi’s constitutional reforms proposal in a referendum on Sunday. A broad based greenback retracement further supported the recovery.

OPEC’s secretary general Barkindo said he was confident that oil demand will continue to rise. He further added that Asia is expected to account for around 70 percent of demand growth.

FxWirePro's Hourly USD Spot Index was at -44.5709 (Neutral) at 1200 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.