As U.S. Federal Reserve officials' remarks dimmed hopes of interest rate cuts, which could slow growth and crimp fuel demand in the largest economy in the world, oil prices continued their downward trend on Monday.

By 00:25 GMT, Brent crude futures had dropped 26 cents, or 0.3%, to $82.53 per barrel, while U.S. West Texas Intermediate crude futures had dropped 23 cents, or 0.3%, to $78.03 per barrel.

On Friday, both benchmarks saw a $1 decrease in closing prices as Fed members disagreed over whether US interest rates are high enough to return inflation to 2%.

Meanwhile, crude oil prices have witnessed a substantial decline over the past month, experiencing an unprecedented drop of $8 per barrel. The plummeting prices have sent shockwaves through the energy market, impacting various sectors worldwide.

According to recent reports, the price of crude oil has dipped from $90 to $82 per barrel, marking a notable shift in market dynamics. This sharp decrease comes amidst escalating concerns over market volatility and uncertainty regarding future demand.

Analysts predict that the US central bank will maintain the dollar's strength by holding its policy rate at its current level for an extended period of time. For investors holding other currencies, dollar-denominated oil becomes more expensive due to a strong dollar.

In a note, ANZ analysts noted that as U.S. gasoline and distillate inventories increased in the week preceding the start of the driving season, oil prices also decreased amid indications of sluggish demand.

Global refiners are facing declining profits from diesel as new facilities increase supply, mild weather in the northern hemisphere reduces demand, and slow economic growth eats into profits.

Even so, the market continued to be buoyed by hopes that supply curbs from OPEC+—the Organization of the Petroleum Exporting Countries and their allies—may be extended into the second half of the year.

According to Iraq's oil minister, who spoke to the state news agency on Sunday, the organization is dedicated to the voluntary reductions in oil production that have been agreed upon by members and is eager to work with other nations to increase market stability. Iraq is the second-largest producer of oil within OPEC.

The minister made the suggestion on Saturday that Iraq had already made sufficient voluntary reductions and would not accept any more when the larger OPEC+ producer group met in early June.

OPEC+ criticized Iraq earlier this month for exceeding its output quota in the first three months of 2024 by a total of 602,000 barrels per day. Baghdad, the group said, had committed to make up for the loss with further production cuts for the remainder of the year.