LONDON: Oil prices slipped on Monday as investors focused on short-term demand concerns ahead of key US inflation data.

Brent crude futures were down 76 cents, or 0.8%, to $85.63 a barrel at 1446 GMT after a 2.2% gain on Friday. US West Texas Intermediate crude was down 69 cents, or 0.8%, at $79.03 after a 2.1% gain in the previous session.

“Crude prices are softening as energy traders anticipate a potentially weakening crude demand outlook as a pivotal inflation report could force the Fed to tighten policy much more aggressively,” said Edward Moya, senior analyst at OANDA, referring to US consumer price data due on Feb. 14.

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“This week could deliver a make or break moment in how bad a recession Wall Street prices in.”

The US Federal Reserve has been raising interest rates to rein in inflation, leading to concerns the move would slow economic activity and demand for oil.

“It is difficult to overstate the importance of this single data point, as traders and the Fed look for confirmation of the gradual downward trend of the past few months,” said Matthew Ryan, head of market strategy at financial services firm Ebury.

Additionally, supply concerns were relieved somewhat as a cargo of Azeri crude set sail from Turkey’s Ceyhan port on Monday, the first since a devastating earthquake in the region on Feb. 6.

Ceyhan is the storage and loading point for pipelines that carry oil from Azerbaijan and Iraq.

Oil prices had risen on Friday after Russia, the world’s third-largest oil producer, said it would cut crude production in March by 500,000 barrels per day (bpd), or about 5% of output, in retaliation against Western curbs imposed on its exports in response to the Ukraine conflict.

Both the Brent and WTI contracts rose more than 8% last week, buoyed by optimism over demand recovery in China after COVID curbs were scrapped in December.