Oil edged lower on Tuesday on expectations that further interest rate hikes in the United States, the world’s biggest oil user, will slow economic growth and limit fuel demand.

Brent futures for March fell 33 cents to $79.32 a barrel, a 0.4 per cent drop, by 0719 GMT. US West Texas Intermediate crude dipped 29 cents, or 0.4pc, to $74.34 per barrel.

Both benchmarks climbed 1pc on Monday, after China, the world’s biggest oil importer and second-largest consumer, opened its borders over the weekend for the first time in three years.

Two United States Federal Reserve officials this week expected the Fed policy rate — now at 4.25pc to 4.5pc — to need to rise to a 5pc to 5.25pc range to bring higher inflation rates under control.

“(The expectation) is more hawkish than what markets are pricing at the moment (4.75-5pc range),” said Yeap Jun Rong, Market Analyst at IG in a note, adding that the upcoming speech from Fed chair Jerome Powell later on Tuesday could mirror the hawkish tone with some pushback as well.

Fed policymakers say fresh inflation data out later this week will help them decide whether they can slow the pace of interest rate hikes at their upcoming meeting, to just a quarter-point increase instead of the larger jumps they used for most of 2022.

China also issued a second batch of 2023 crude import quotas, according to sources and documents reviewed by Reuters, raising the total for this year by 20pc from the same time last year.

But analysts warned that China’s demand revival may play a limited role to drive up oil prices under the global economic downward pressure.

“The social vitality of major Chinese cities is rapidly recovering, and the restart of China’s demand is worth looking forward to. However, considering that the recovery of consumption is still at the expected stage, the oil price will most likely remain low and range-bound,” said analysts from Haitong Futures.

Separately, US crude oil stockpiles likely fell 2.4 million barrels, with distillate inventories also seen slightly down, a preliminary Reuters poll showed on Monday.

Industry group American Petroleum Institute is due to release data on US crude inventories at 2030 GMT on Tuesday.

The Energy Information Administration, the statistical arm of the US Department of Energy, will release its own figures at 1430 GMT on Wednesday.