Oil prices decline Tuesday following hawkish comments from centrals bankers, overshadowing prospects of increased oil demand from China after three years of strict Covid-19 measures.

A barrel of European benchmark crude Brent, to be delivered in March, trades at USD 79.22 Tuesday morning against USD 80.47 Monday afternoon. Meanwhile, US counterpart West Texas Intermediate costs USD 74.28 per barrel Tuesday morning against USD 75.77 Monday.

Both Brent and WTI dove by 8% last week, the biggest early-year decline since 2016, reports Reuters. On Monday, prices rose by 1%.

US Federal Reserve execs continue to fuel interest rate hike expectations, now floating the possibility of an interest rate above 5.00%. On Monday, President and CEO of the Federal Reserve Bank of San Francisco Mary C. Daly and her Atlanta counterpart Raphael Bostic made hawkish comments sowing doubt about whether the market is correct in projecting an interest rate ceiling of just below 5%.

Monday’s oil price increases were spurred by China’s border reopening after three years of extensive Covid-19 travel restrictions. The reopening improves the outlook for fuel demand, reports Reuters.

On Tuesday, however, the remarks regarding the interest rate hike from the central bankers outweighed the good news out of China.

Elsewhere in commodities, a troy ounce of gold trades for USD 1,974.82 against USD 1,874.89 Thursday afternoon.

Johan Sverdrup output fills supply gap of Russian crude

Oil prices edge up following Chinese border opening