The West Texas Intermediate for October delivery lost $0.55 to settle at $46.42 a barrel on the New York Mercantile Exchange, while Brent crude for October delivery erased $0.88 to close at $48.38 a barrel on the London ICE Futures Exchange, Xinhua news agency reported.
The US dollar rallied against other major currencies on Tuesday as recent hawkish remarks from Federal Reserve officials raised market expectation for an interest-rate hike by year-end.
The dollar index, which measures the greenback against six major peers, was up 0.56 per cent at 96.116 in late trading, the highest level in three weeks.
Oil prices also decreased on market concerns over the increasing Middle East crude output.
Iraq, which has exported more crude from its southern ports in August, will continue to ramp up output, its oil minister said on Saturday.
