By Jenny W. Hsu

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 traded at $47.11 a barrel at 0120 GMT, down $0.53 in the Globex electronic session. October Brent crude on London's ICE Futures exchange fell $0.47 to $49.45 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 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.

"The market will be in a wait-and-see mode until the meeting, even though the general expectation is that OPEC will do a lot of talking but not much doing," said Aaron Lynch, an energy analyst at OptionsXpress.

The low expectation from OPEC is mostly a result of several failed attempts in the past when the group couldn't come to an agreement on how to stimulate the prices.

When prices dropped to a 13-year low in February, four oil majors, including Saudi Arabia, floated the idea of a production freeze. However, the suggestion never came to fruition because Iran refused to go along with a production limit. Iran's rejection prompted Saudi Arabia to back out of the deal at the last minute.

Analysts say even though prices are still in the doldrums compared with the above-$100 level seen in mid 2014, the steady uptrend seen in the past few months could give Saudi Arabia more justification to leave prices alone, dousing any possibility of a production freeze.

"An agreement seems some way off, if not impossible," said Stuart Ive, a client manager at OM Financial.

Nymex reformulated gasoline blendstock for September--the benchmark gasoline contract--fell 143 points to $1.4985 a gallon, while September diesel traded at $1.4928, 44 points lower.

ICE gasoil for September changed hands at $435.25 a metric ton, down $2.50 from Friday's settlement.

-Write to Jenny Hsu at jenny.hsu@wsj.com

(END) Dow Jones Newswires

August 28, 2016 22:54 ET (02:54 GMT)

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