Oil inches lower on Tuesday on expectations that more interest rate hikes in the United States, the world’s biggest oil user, will slow economic growth and limit fuel demand.
Both benchmarks soared 1% in trade yesterday after top importer China opened its borders over the weekend for the first time in three years.
Meanwhile, United States Federal Reserve officials this week underlined a need for the Fed policy rate to rise to a 5% to 5.25% range.
Fed policymakers said fresh inflation data will help them navigate the strategy for their upcoming meeting.
Top importer China has also issued a second batch of 2023 crude import quotas. This would raise the total for this year by 20% for the same time last year.
Analysts have cautioned against lingering pressure from a weak economic environment despite support from a reopening of Beijing’s borders.
Meanwhile, Russia’s energy minister has said that the country is drafting more measures to cap discounts to international benchmarks on Russian oil prices.
Russia is the world’s second largest oil exporter after Saudi Arabia. Oil and gas sales account for almost half of the country’s state budget revenue.
President Vladimir Putin last month signed a decree last month that banned the supply of crude oil and crude oil products to the part of the Western world that imposed the price caps.
The restriction on these countries will kick in from Feb. 1. The restrictions will be imposed for a period of five months.
Russian oil traditionally trades at a discount to international benchmarks, like Brent. This discount has widened after countries imposed sanctions over Ukraine.
