Oil edged lower, along with broader commodities markets, as China’s return from Lunar New Year holidays failed to deliver hoped-for gains.

West Texas Intermediate slid toward $79 a barrel after topping $81 last week. Risk-off sentiment permeated markets ahead of a Federal Reserve meeting Wednesday that’s expected to result in another rate increase.

Oil has had a bumpy ride in recent months, with prices supported by the demand outlook in China but held back by concerns that the U.S. could slip into recession. Some investors are speculating the Fed is now nearing the end of its tightening cycle.

The market “focuses on Chinese demand after the holiday,” said Ole Hansen, Saxo Bank’s head of commodity strategy. There’s a “pivotal week ahead, with a slew of data and central bank meetings, which will continue the argument between recession and soft landing, driving energy markets.”

There are some signals from China that consumption is improving: Sinopec said gasoline sales were up 20% over the Lunar New Year break, while the culture and tourism ministry said more than 300 million trips were made during the holidays. Yet Bloomberg’s aggregate index of eight early indicators showed few signs of improvement in January.

Traders are also on the lookout for any fallout from the European Union’s impending ban on seaborne imports of Russian oil products. The restrictions come into force in about a week, along with price caps similar to the mechanism imposed on the nation’s crude in December.

Asad Zulfiqar and Yongchang Chin report for Bloomberg News.

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