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 that was 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.
"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."