U.S. crude settled down 26 cents at $59.43 a barrel on Monday as a rallying dollar weighed on the commodities complex amid a bearish price outlook by influential Wall Street firm Goldman Sachs and risks of growing oversupply.
Crude oil prices erased early gains of more than $1 a barrel on worries of turmoil in the Middle East after a major advance by Islamic State militants in Iraq and renewed air strikes by a Saudi-led coalition against Houthi militia in Yemen.
But the market gave back those gains as trading progressed in New York, after the dollar rose 0.8 percent against a basket of major currencies, its most in three weeks.
The 19-commodity Thomson Reuters/Core Commodity CRB Index, led by crude oil, was down nearly a quarter percent as the stronger dollar made raw materials denominated in the currency less affordable to holders of the euro and other denomination.
Front-month Brent futures were down 52 cents at $66.29 a barrel by 2:32 p.m.