(Reuters) -Oil fell on Monday as concern over the economic impact of the U.S. Federal Reserve potentially raising interest rates and weaker Chinese manufacturing data outweighed support from new OPEC+ supply cuts taking effect this month.

The Fed, which meets on May 2-3, is expected to increase interest rates by another 25 basis points. The U.S. dollar rose against a basket of currencies on Monday, making oil more expensive for other currency holders.

Brent crude fell $1.21, or 1.5%, to $79.12 a barrel at 0822 GMT, while U.S. West Texas Intermediate (WTI) crude lost 96 cents, or 1.3%, to trade at $75.82.

“The prospect of further rate hikes to be announced by the Fed this week is expected to drive an increase in near-term price volatility,” said Baden Moore, head of commodity and carbon strategy at National Australia Bank (OTC:NABZY) (NAB).

In the week ahead, the Reserve Bank of Australia is widely expected to extend a rate hike pause on Tuesday and the European Central Bank could surprise with an outsized half-point increase on Thursday.

Weak economic data from China also weighed. China’s manufacturing purchasing managers’ index (PMI) declined to 49.2 from 51.9 in March, slipping below the 50-point mark that separates expansion and contraction in activity on a monthly basis.

Some support came from voluntary output cuts of around 1.16 million barrels per day by members of the Organization of the Petroleum Exporting Countries and allies including Russia, a group known as OPEC+ which take effect from May.

“We believe the oil market will be in deficit through the remainder of the second quarter” following the OPEC+ cuts, said NAB’s Moore, who added that the bank expected the curbs plus higher demand to drive prices higher.