Oil prices fell by around $3 a barrel on Monday after analysts highlighted rising global supplies and concerns about demand growth just ahead of key inflation data and a U.S. Federal Reserve meeting later this week.

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Brent crude futures fell $2.95, or 3.9%, to settle at $71.84 a barrel, their lowest since Dec. 2021. West Texas Intermediate crude fell $3.05, or 4.4%, to settle at $67.12 a barrel.

Goldman Sachs cut its oil price forecasts early on Sunday, citing higher-than-expected supplies later this year and through 2024. The bank's December crude price forecast now stands at $86 a barrel for Brent, down from $95, and at $81 a barrel for WTI, down from $89.

"Goldman capitulating on their bullish price forecast appears to have been the catalyst to kickstart selling today," said Kpler analyst Matt Smith.

The revision comes at the start of a busy week for the U.S. Federal Reserve, which meets on Wednesday. While the Fed is expected to leave interest rates unchanged this month, investors are concerned that rate hikes are likely to resume next month, said UBS analyst Robert Yawger.

The Fed's rate hikes have strengthened the dollar, making commodities denominated in the U.S. currency more expensive for holders of other currencies and weighing on prices.

"The Fed meeting and inflation pressures remain key issues for the market this week," said Rob Haworth, senior investment strategist at U.S. Bank Asset Management.

"The more likely hold on interest rates means investors will closely track Fed Chair Powell's press conference for the expected path for interest rates," Haworth said.

Also weighing on investors' minds, oil demand recovery has been muted in China, the top importer of crude oil and refined products.

"Chinese demand has shown no signs of materializing, and it could be as much as 2 million barrels a day, so it is a significant amount. There are definitely fears that OPEC and IEA will cut their demand forecasts," Yawger said.

The Organization of Petroleum Exporting Countries and the International Energy Agency will each release their monthly market updates on Tuesday.

Last week, both Brent and WTI posted a second straight weekly decline after disappointing Chinese economic data erased the price boost from Saudi Arabia's pledge to cut production in July.