REUTERS
Oil prices fell on Monday after closing the previous session at their lowest levels since March on renewed oversupply concerns from the United States and Iraq, Reuters reported.
Investors are looking to the U.S. Federal Reserve for direction this week. The central bank starts a two-day policy meeting on Tuesday that could result in a September interest rate hike that would strengthen the greenback, according to the agency.
A weaker dollar makes dollar-denominated commodities, including oil, cheaper for consumers using other currencies.
Brent crude for September LCOc1 was traded 2 cents lower at $54.60 a barrel as of 0655 GMT, and U.S. crude for September CLc1 was down 12 cents at $48.02 a barrel.
On Friday, Baker Hughes, the world's largest oilfield services company, published data on the number of drilling rigs in the United States that increased by 19, or 2.2%, totaling 876 rigs – a year-over-year decline of 53.5%, or 1,007 rigs.
A stronger U.S. dollar also exerts pressure on oil prices – the U.S. Dollar Index (USDX, DXY), an index (or measure) of the value of the United States dollar relative to a basket of six foreign currencies of major U.S. trade partners, – rose to 97.26 points last week.
The expectation of continued abundant oil supplies, including an output increase from Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries, led the National Australia Bank on Monday to revise its oil price forecasts in a monthly report.
"We now expect oil prices to stay below $70 a barrel for the rest of 2015 and 2016," the agency reported citing a bank analyst.