Oil slipped on Tuesday amid dimmed hopes on the Chinese demand and economy.

Brent crude futures dropped 0.54% to $85.45 per barrel while U.S. WTI crude dipped by 0.47%, at $79.88. The two main gauges revived by roughly 15% from earlier dips during the previous weeks.

A nudge up in the export quotas for the refined oil imposed by the government in China has been witnessed by the kick off of the new year.

Investors perceived that the edge up took place due to the weak demand as China is currently suffering from the surged Covid-19 cases.

The Chinese factory activity contracted in December as the hiked number of Covid cases was a major setback for the output and had a negative impact on the demand.

Another indication for dimmed expectations, is that the pillars of economic growth worldwide including USA, China and Europe are shrinking altogether, quashing the hopes of brighter outlook in 2023.

Eyes are now on Fed's minutes that is scheduled to release next Wednesday, to seek clues on the rate direction during the upcoming months.

Another anticipated data is the U.S. Job figures due on Friday with predictions that the labour market will continue to witness a retreat.