Concerns about oversupply and weak demand kept the oil prices under pressure despite the price rise amidst rising COVID-19 cases in Europe and a potential release of Japanese oil reserves after a request from the United States to release oil from its emergency stockpile.

Prices of the Brent and U.S. West Texas Intermediate (WTI) crude benchmarks fell more than $1 in early trading, lowest since October 1.

 Brent was up 31 cents, or 0.4%, at $79.20 a barrel while U.S. crude gained 34 cents, or 0.5%, to $76.28.

Investors sought safe havens such as the dollar early in the session, contributing to the sharp decline in oil prices, according to analysts.

The U.S. dollar traded close to a 16-month high against the euro on Monday, making dollar-priced crude more expensive for buyers with other currencies.

The prospect of the release of oil from strategic petroleum reserves (SPR) maintained the price pressure on oil and kept Brent under the critical $80 mark.

Fereidun Fesharaki, chairman of consultancy Facts Global Energy has said any SPR release is going to have only a brief impact for two or three weeks before everything goes back to where it was.

The combined SPR release could be 100 million to 120 million barrels or even higher,  according to Citi analysts. This includes 45 million to 60 million barrels from the United States, about 30 million barrels from China, 5 million barrels from India and 10 million barrels each from Japan and South Korea, the bank estimated.

Investors are closely watching developments in the Middle East with escalating tension between the Saudi-led coalition fighting the Iran-backed Houthi movement in Yemen.