The price of oil is falling at a moderate pace on Monday afternoon on fears of new rate hikes by the Federal Reserve.

As the Friday statistics showed, the U.S. consumer price index (PCE) rose 0.6% in January compared to the previous month, showing the highest gain in six months. This caused oil drops in value.

The PCE Core Index, which excludes food and energy costs, also rose 0.6% MoM (0.4% in December). In annual terms, the indicator, which the Federal Reserve closely checks when assessing inflation risks, accelerated to 4.7% from 4.6% in December. Analysts had expected less of a rise of 0.4% and 4.3%, respectively.

A persistently high rate of inflation could push the Fed to raise interest rates more significantly, which would have a negative impact on the U.S. economy. A recession, in turn, would reduce demand for fuel, analysts said.

“A series of better-than-expected U.S. inflation data has led to a revision of rate expectations upward,” IG Asia Pte market analyst Yip Jun Rong wrote. At the same time, he noted that signals about the recovery of the Chinese economy can support expectations for global demand for fuel.

April futures on Brent at London’s ICE Futures exchange fell by $0.27 (0.32%) to $82.89 per barrel. WTI April futures quotations fell by $0.20 (0.26%) to $76.12 per barrel at electronic auctions of NYMEX by the indicated time.

Brent added 0.2% and WTI gained 0.3% over the week.

Earlier we reported that Saudi Arabia’s oil production fell 0.3% in December, while exports rose 2.2%.