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Brent was down 57 cents, or 1%, at $55.42 a barrel at 1205 GMT,
after falling $1 to a session low of $54.99 earlier.
U.S. West Texas Intermediate (WTI) slipped 26 cents, or 0.5%, to
$51.98 a barrel.
"The renewed concerns about demand due to very high numbers of
new corona cases and further mobility restrictions, plus the
stronger U.S. dollar, are generating selling pressure,"
Commerzbank analyst Eugen Weinberg said.
Worldwide coronavirus cases surpassed 90 million, according to a
Reuters tally.
Despite strict national lockdowns, Britain is facing the worst
weeks of the pandemic, and in Germany cases are still rising.
"The recovery in oil demand is stalling in Europe in particular
due to the prolonged lockdowns. Concerns over Chinese demand are
also growing due to the spike in Covid-19 cases in the country,
as traders fear new lockdowns," said Rystad Energy’s analyst
Bjornar Tonhaugen.
Mainland China saw its biggest daily increase in virus
infections in more than five months, authorities said, as new
infections rose in Hebei, which surrounds the capital, Beijing.
Shijiazhuang, the provincial capital and epicentre of the new
outbreak, is in lockdown, with people and vehicles barred from
leaving, as authorities seek to rein in the spread.
A stronger dollar, supported by hopes for more stimulus to boost
the world's largest economy, also weighed on oil prices.
Oil is usually priced in dollars, so a stronger dollar makes
crude more expensive for buyers with other currencies.
Brent and WTI rose almost 8% last week, supported by Saudi
Arabia's pledge for a voluntary oil output cut of 1 million
barrels per day (bpd) in February and March as part of a deal
for most OPEC+ producers to hold production steady.
The Saudi cut is expected to bring the oil market into deficit
for most of 2021 even though lockdowns are hitting demand,
analysts said.
Tougher containment measures to curb the virus introduced by
European countries were concerning for fuel demand, JBC Energy
Research said on Monday, but added: "Our projections suggest
that this latest Saudi production cut should be enough to keep
crude fundamentals broadly solid."
(Reporting by Bozorgmehr Sharafedin in London. Additional
reporting by Jessica Jaganathan in Singapore. Editing by Mark
Potter and Jane Merriman)
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