Crude oil prices continued to fall in early Asian trade Tuesday, as optimism for a production freeze faded on reports that Iraq is preparing to ramp up exports and Nigeria could follow soon.

Oil prices settled down more than 3 percent, after touching two-month highs last week, on worries about burgeoning Chinese fuel exports, more Iraqi and Nigerian crude shipments and a rising U.S. oil rig count.

The S&P energy index lost 0.9 percent, its worst performance in two weeks and was the worst-performing of the 10 major S&P groups.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in October traded at $46.69 a barrel at 0224 GMT, down $0.72 in the Globex electronic session. October Brent crude on London's ICE Futures exchange fell $0.60 to $48.56 a barrel.

According to Ben Le Brun, an analyst at OptionsXpress, "In the past 12 months, we have been burnt many times that OPEC will have some movement to adjust the production. The market now takes anything OPEC says with a grain of salt."

Fed to Meet Friday

Meanwhile, eyes are now turned to Federal Reserve Chair Janet Yellen's speech which will take place on Friday at the annual central bankers' meeting in Jackson Hole, Wyoming, to assess the odds of an interest rate hike in coming months.

There’s a good chance of a rate hike, hinted at by Fed Vice Chairman Stanley Fischer's comments that the U.S. economy was close to hitting the Fed's job and inflation targets.