Oil set for third monthly drop as China, Fed meeting in focus

​Oil headed for a third straight monthly loss as traders awaited clues on China's economic recovery, the latest guidance from cautious OPEC+ producers and Wednesday's monetary policy decision from the Federal Reserve.

West Texas Intermediate slid below US$77 a barrel on Tuesday to the lowest in almost three weeks, after losing more than two per cent the previous session.

Investors are positioning ahead of expected rate hikes this week from the U.S. and European central banks, leading to risk-off sentiment in equities and a surge in the dollar. A strengthening dollar makes commodities priced in the greenback more expensive for holders of other currencies, curbing demand.