FX.co ★ Oil Prices Slip On Demand Worries

Oil prices fell over 1 percent on Tuesday, with China demand worries and rate hike fears weighing on prices.

Benchmark Brent crude futures dipped 1.1 percent to $106.45 a barrel while U.S. crude futures were down 1.2 percent at $103.95.

Stringent coronavirus lockdowns in Shanghai and elsewhere in China raised worries about fuel demand.

Zero-Covid efforts are slowing China's economy as the country prepares for its key Communist Party Congress.

Analysts expect the country to maintain the basic approach of "zero Covid" over the next few months despite the mounting social and economic costs.

Meanwhile, as EU leaders firm up plans to announce a sixth tranche of sanctions against Russia this week, Slovakia is seeking an exemption against approving a ban on Russian oil. Hungary also said it will not support sanctions on Russian oil and gas shipments.

Traders also await the latest round of U.S. inventory and supply reports, the Federal Reserve's decision on interest rates and a meeting of ministers from OPEC and its allies for directional cues.

The Federal Reserve is set to hike interest rates by 50 bps when it announces its policy decision on Wednesday. The OPEC and its allies are scheduled to meet on Thursday.