Oil prices slipped from multi-month highs in volatile trade on Monday as U.S. stocks fell near 2% on concerns over the outcome of runoff elections in Georgia.
The oil market pared earlier losses after the Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+, could not decide on Monday whether or not to increase output in February and will meet again on Tuesday.
Earlier in the session, both benchmarks rose and fell by $1 a barrel with WTI reaching its highest since February and Brent its highest since March. The premium of Brent over WTI was on track to rise to its highest since May.
The S&P 500 and the Dow also fell from record levels on the first trading day of the year as President Donald Trump travels to Georgia in a bid to keep the U.S. Senate in the hands of his Republican Party.
OPEC+ oil producers were split on Monday over increasing output from February as some feared a hit from new coronavirus lockdowns, while Russia and Kazakhstan said demand recovery justified higher production, five OPEC+ sources said.
Two sources said OPEC+ will meet again on Tuesday.
OPEC+ increased output by 500,000 barrels per day (bpd) this month but some members have questioned the need to increase more from February due to an upsurge in the COVID-19 pandemic.
"Vaccine rollouts have not been as successful for most of the world and that does not bode well for the case to hike oil production by another 500,000 bpd in February," said Edward Moya, senior market analyst at OANDA in New York.
In Europe, England was preparing for a new coronavirus lockdown, while Germany was weighing whether to allow a delay in administering a second dose of the COVID-19 vaccine to make scarce supplies go further.
In the Middle East, meanwhile, tensions supported oil prices earlier in the day after Iran's Revolutionary Guards seized a South Korean-flagged tanker in Gulf waters and Iran resumed uranium enrichment at an underground nuclear facility.