Oil prices slipped on Tuesday as a rebound in COVID-19 cases in Europe raised concerns over demand amid expectation that supply will rise, while some in the market still fear the United States may release crude reserves to stop a rally in gasoline prices.

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Brent futures fell 9 cents, or 0.1%, to $81.96 a barrel, as of 0105 GMT, while U.S. West Texas Intermediate (WTI) crude slid 10 cents, or 0.1%, to $80.78 a barrel.

Europe has again become the epicentre of the COVID-19 pandemic, prompting some governments to consider re-imposing lockdowns, while China is battling the spread of its biggest outbreak caused by the Delta variant.

"Crude oil fell as President Biden faced increasing pressures to tap U.S. reserves to quell rising gasoline prices," ANZ said in a note. "Sentiment was also hit by new restrictions on travel in Europe."

The Organization of the Petroleum Exporting Countries (OPEC) last week cut its world oil demand forecast for the fourth quarter by 330,000 barrels per day (bpd) from last month`s forecast, as high energy prices hampered economic recovery from the COVID-19 pandemic.

Fears of declining demand come as supplies are expected to rise.

Last week, U.S. energy firms added oil and natural gas rigs for a third week in a row, encouraged by a 65% increase in U.S. crude prices so far this year.

U.S. shale production in December is expected to reach pre-pandemic levels of 8.68 million barrels a day, according to Rystad Energy.

There is additional pressure on oil prices stemming from a strong dollar, which makes the commodity expensive for buyers holding other currencies. The U.S. dollar hit a 16-month high against a basket of currencies as investors worried about the global economy.

Money managers raised their net long U.S. crude futures and options positions in the week to Nov. 9, the U.S. Commodity Futures Trading Commission (CFTC) said on Monday.

The speculator group raised its futures and options position in New York and London by 11,328 contracts to 353,807 during the period.