Oil prices fell nearly 2 percent on Monday, snapping two consecutive days of gains, on caution over galloping Middle East crude output and a stronger dollar boosted by speculation of a U.S. rate hike by the year-end.
Iraq, which has exported more crude from its southern ports in August, will continue ramping up output, its oil minister said on Saturday. Top exporter Saudi Arabia has kept output at around record levels this month.
The dollar hit a three-week high against the yen after Federal Reserve Chair Janet Yellen bolstered expectations in a speech on Friday that the central bank would raise interest rates soon. A stronger dollar makes commodities denominated in the greenback less affordable for holders of other currencies.[USD/]
Focus on surging Middle East production and the strengthening dollar also offset data from energy monitoring service Genscape showing a drawdown of 287,444 barrels at the Cushing, Oklahoma delivery point for U.S. crude futures during the week ended Aug. 26, traders who saw its report said.
Brent crude LCOc1 was down 77 cents, or 1.5 percent, at $49.15 a barrel by 11:15 a.m. EDT (1515 GMT), almost erasing gains from the previous two sessions.