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Detection of the new strain prompted several countries to close
their borders to Britain, though a British minister said the UK
and France are working to reopen one of Europe's most important
trade routes.
Brent crude was down 43 cents, or 0.8%, at $50.48 a barrel by
1300 GMT, while U.S. West Texas Intermediate (WTI) crude fell 48
cents, or 1%, to $47.49.
Both benchmarks slid nearly 3% on Monday, partly erasing recent
gains driven by the rollout of COVID-19 vaccines, seen as key to
allowing a return to normal life.
"In the battle between immediate negative concerns and future
optimism, the former is now fighting back," said Tamas Varga of
oil broker PVM.
The latest rally culminated in Brent hitting $52.48, its highest
since March, on Friday. Some see potential for prices to fall
further.
"The environment remains decidedly risk-averse," said Jeffrey
Halley of brokerage OANDA. "Given the scale of oil's two-month
rally, a deeper correction cannot be ruled out."
Oil gained support from U.S. Congress approval for a $892
billion coronavirus aid package after months of inaction.
In focus will be the latest U.S. oil inventory reports, expected
to show crude stocks fell by 3.3 million barrels. The American
Petroleum Institute's report is due at 2130 GMT.[EIA/S]
The Organization of the Petroleum Exporting Countries and
allies, a group known as OPEC+, are set to boost output by
500,000 barrels per day in January. There is no sign yet of any
wavering induced by the price drop.
Russian Deputy Prime Minister Alexander Novak on Monday said the
rise in output should not result in a glut.
(Reporting by Sonali Paul in Melbourne and Koustav Samanta in
Singapore; Editing by Kirsten Donovan and David Goodman)
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