Oil prices fell more than 3% on Monday on worries that widening coronavirus lockdowns across Europe will weaken fuel demand, and as traders braced for turbulence during the USA presidential election week.
Futures in NY added 0.6%, after rising 2.9% on Monday - the biggest gain in more than three weeks.
"Near-term oil fundamentals will continue to deteriorate until the unprecedented rise in Covid infections is brought under control", said Stephen Brennock of oil broker PVM.
"Markets are reflecting that", he said.
Futures traded higher with global benchmark Brent up US$1 a barrel or US$2.52% at US$40.71, and USA crude 92 cents a barrel or 2.7% higher at US$38.58 by 11:33 a.m. EST (15:33 GMT).
Global oil demand will peak at 102m b/d in 2028, down from the previous estimate of 106m b/d in 2030, according to Rystad Energy.
Italy is the latest country in Europe to tighten COVID-19 restrictions, including limiting travel between the worst-hit regions and imposing a nightly curfew, which will limit fuel demand.
Vitol sees winter demand at 96 million barrels per day (bpd) while Trafigura expects demand to drop to 92 million bpd or lower.
Attack on Afghan university leaves 19 dead
Interior Ministry spokesman Tariq Arian said the fighting was ongoing as security forces surrounded the campus. Fraidoon Ahmadi, a 23-year-old student, told AFP he was in class when gunfire broke out at the university.
Oil pared some losses after Japan's export orders grew for the first time in two years and China's factory activity rose to a near-decade high in October. New infections spiked in the United States as well.
The rest of the week promises to be as turbulent as the start with Americans heading to the polls on Tuesday for an election that could reshape USA policy on everything from fiscal stimulus to Iran and fracking.
Libyan supply stands at about 800,000 bpd, up more than 100,000 bpd from a few days ago, a Libyan source told Reuters on Saturday.
"It would definitely be a relief for the market if it did not have to worry about an additional 1.9 million barrels a day of supply coming into the market at the start of January", Schieldrop said of OPEC+'s plans to delay its output hike.
A victory by Trump is viewed as bullish for oil because of sanctions on Iran and his support for Saudi-led OPEC oil cuts to support prices.
The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russian Federation, a grouping called OPEC+, slashed oil output from May to support prices and tapered the cut to 7.7 million barrels per day (bpd) in August.
OPEC+ is scheduled to hold a policy meeting over November 30 and December 1.