Oil fell towards $49 a barrel on Monday, pressured by high output from Middle East OPEC members and as a stronger U.S. dollar weighed on commodities.
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.
Brent crude was 70 cents lower at $49.22 a barrel at 1056 GMT. The global benchmark is down more than 6 percent from its 2016 peak of $52.86 reached on June 9. U.S. crude was down 63 cents at $47.01.
“A much stronger U.S. dollar is causing selling pressure today,” said Carsten Fritsch of Commerzbank. “Speculative financial investors in particular are likely to use this as an opportunity to take profits.”
The U.S. currency rose to a three-week high against the yen on Monday after the Federal Reserve bolstered expectations that it would increase interest rates soon.
A rise in the dollar makes dollar-priced commodities such as crude more expensive for holders of other currencies, and tends to put downward pressure on oil prices.
The comments about high oil output have dampened expectations that OPEC and outside producers such as Russia will agree steps next month to support prices such as a production freeze, following the collapse of a similar effort in April.
“The market is increasingly likely to discount the outcome of the event, given, even in the instance of a freeze being agreed, compliance will be an issue,” Barclays said in a report.
Members of the Organization of the Petroleum Exporting Countries are due to meet informally in Algeria on Sept. 26-28 on the sidelines of the International Energy Forum. Russia is also expected to attend the IEF.
Oil prices are less than half their level of mid-2014 because of a persistent supply glut. The chief executive of U.S. oil company ConocoPhillips, Ryan Lance, said at an industry conference in Stavanger, Norway, he believed oversupply would extend into 2017.