Crude prices fell in early morning trade in Asia on Monday, as investors locked in their profits on growing signals that the U.S. Federal Reserve could raise interest rates as early as next month.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in October CLV6, -1.62% traded at $46.97 a barrel, down $0.68, or 1.4%, in the Globex electronic session. October Brent crude LCOV6, -1.40% on London’s ICE Futures exchange fell $0.61, or 1.2%, to $49.32 a barrel.
Oil prices were choppy as Federal Reserve Chairwoman Janet Yellen signaled growing conviction that the central bank will raise short-term interest rates in the weeks or months ahead.
A rise in U.S. interest rates usually does not bode well for oil prices which are priced in the greenback. Higher interest rates could push the dollar higher, making oil products more expensive for oil traders who hold a different currency. The WSJ Dollar Index BUXX, 0.17% was largely steady after rising 0.8% over the weekend.
A key driver for the oil markets in the coming weeks would be any new rhetoric from members of the Organization of the Petroleum Exporting Countries, who are slated to have an informal meeting next month to discuss the oil markets.