By Neanda Salvaterra and Stephanie Yang 

Crude prices fell Wednesday, weighed down by a stronger dollar and concerns that rising U.S. shale production may offset a move by major producers to cut global supply.

Light, sweet crude for February delivery was recently down 99 cents, or 1.9%, at $51.49 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, was recently down $1.05, or 1.9%, at $54.42 a barrel.

The Wall Street Journal Dollar Index, which tracks the dollar against a basket of other currencies, rose 0.4% to 91.32 Wednesday. As oil is priced in dollars, it becomes more expensive for holders of other currencies as the U.S. currency appreciates.

On Wednesday, the monthly oil market report from the Organization of the Petroleum Exporting Countries showed a decline in total output in December, following the deal to limit production in November. However, analysts said the cartel could face challenges in cutting back enough to rebalance the supply glut that had sent prices tumbling.

"Even by their own numbers, they don't really see this cut getting us back to a normal level for global oil stocks," said Robbie Fraser, commodity analyst at consultant Schneider Electric SA in Louisville, Ky. "If OPEC doesn't believe they can get the deal done, then who's going to?"

While production from OPEC has fallen, climbing output from countries such as Iraq and Libya have raised concerns about the sustainability of the deal and its boost to oil prices.

Investors are getting jittery about reports of rising U.S. shale oil production that could wipe out the price gains made since the OPEC deal.

OPEC and other producers' decision to reduce output by nearly 1.8 million barrels a day has supported crude prices and prompted U.S. producers to increase shale output, which now surpasses the volume that Saudi Arabia, the world's top crude exporter, previously committed to cutting.

Earlier in the week, the U.S. Energy Information Administration projected that shale oil production would increase to 4.75 million barrels a day in February. The body also revised upward its shale oil production numbers for January to 4.71 million barrels a day from 4.54 million.

"This confirms that U.S. shale oil production has bottomed out," Commerzbank analysts said in a note. The shale ramp up will make it harder for OPEC to rebalance oil markets, they added.

Traders are awaiting inventory data from the American Petroleum Institute on Wednesday, as well as official data from the U.S. Energy Information Administration on the amount of oil in storage, scheduled for release on Thursday.

"The market's looking for something to grab onto," said Ric Navy, senior vice president for energy futures at RJ O'Brien & Associates.

Gasoline futures fell 2.4% to $1.5622 a gallon, and diesel futures lost 1.6% to $1.6228 a gallon.

Benoit Faucon contributed to this article.

Write to Neanda Salvaterra at neanda.salvaterra@wsj.com and Stephanie Yang at stephanie.yang@wsj.com

(END) Dow Jones Newswires

January 18, 2017 10:25 ET (15:25 GMT)