Oil prices dipped toward $70 a barrel on Monday tracking modest Wall Street losses on the eve of a meeting of the U.S. Federal Reserve, and after OPEC's president said current prices are not bad.

U.S. crude fell 33 cents to $70.60 a barrel by 12:45 p.m. EDT after spending much of the day in positive territory. London Brent crude eased 12 cents to $73.47.

The petroleum markets continue to lack a clear price direction as traders are seemingly waiting for trends in the recently correlated U.S. dollar and equity markets to become clear, said Tim Evans, energy analyst at Citi Futures Perspective in New York.

Wall Street stocks were slightly weaker on profit-taking, while the dollar also fell against other currencies. Over the past several months, oil prices have tended to track equities markets while moving opposite the greenback.

The U.S. Federal Reserve meets on Tuesday and Wednesday, amid expectations it is ready to start raising interest rates. Dealers said the meeting, along with a slew of economic indicators toward the end of the week, could be pivotal to the direction of oil prices.

Oil's losses came after OPEC President Jose Botelho de Vasconcelos said prices are not bad at current levels -- a signal that the cartel is unlikely to cut output at a meeting next month.

OPEC has already agreed to cut some 4.2 million barrels per day from the world market since last September to counter slumping prices and demand in the economic slowdown.

Adding some support, the U.S. National Hurricane Center said a low pressure system southwest of the Cape Verde Islands could develop into the first tropical cyclone of the Atlantic hurricane season.

Tropical storms and hurricanes can impact energy supplies by shutting down offshore platforms and coastal refineries.

(Additional reporting by Barbara Lewis and Fayen Wong; Editing by David Gregorio)

(Reporting by Richard Valdmanis; Editing by Marguerita Choy)