Oil prices fell Monday as worries over the U.S. raising interest rates as early as next month rippled through an already jittery market.
U.S. crude for October delivery recently fell 76 cents, or 1.6%, to $46.88 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 69 cents, or 1.4%, to $49.23 a barrel on ICE Futures Europe.
Federal Reserve Chairwoman Janet Yellen on Friday signaled growing conviction that the central bank would raise short-term interest rates in the weeks or months ahead.
A rise in U.S. interest rates usually doesn't bode well for oil prices, which are priced in dollars. Higher interest rates could push the dollar higher against other currencies, making oil products more expensive for oil traders who use a different currency. The WSJ Dollar Index recently rose 0.3%.
Oil prices are "off to a weak start as attention has shifted toward a stronger U.S. dollar that, in turn, has emanated from Friday's suggestion of a rate hike," said energy-advisory firm Ritterbusch & Associates in a note.
While oil prices have climbed more than 25% this year on expectations that the global glut of crude is set to shrink, many investors and analysts see $50 a barrel as a ceiling, because some companies can afford to increase production around that level.
Norway's Statoil ASA said Monday that the giant Johan Sverdrup field in the North Sea can be profitable even if oil prices fall to less than $25 a barrel. The state-owned oil producer also increased its expected output from the field.
Meanwhile, as September approaches there is continued speculation over whether major oil producers, including Russia and members of the Organization of the Petroleum Exporting Countries, will agree to limit output.
Gasoline futures recently fell 2.5% to $1.4754 a gallon. Diesel futures fell 1.3% to $1.4780 a gallon.
--Kjetil Malkenes Hovland contributed to this article