Oil prices dipped today on growing worries about fuel demand as Covid-19 outbreaks worsened in top crude importer China, and jitters about the outcome of US Midterm elections.

Brent crude futures for January delivery fell 72 cents to $97.20 a barrel, a 0.7% loss, by 16:32 GMT. US crude fell $1, or 1.1%, to $90.79 per barrel.

"The market is entering today with a certain degree of skepticism surrounding the election... It's a wait to see what the result is type of a situation here," said Bob Yawger, director of energy futures at Mizuho in New York.

On Monday, both benchmarks hit their highest since August on reports that leaders in China were weighing an exit from the country's strict Covid-19 restrictions.

But new cases have surged in Guangzhou and other Chinese cities, dimming prospects for fewer restrictions.

"Rising Covid cases in China is on most trader's radars this morning, as the "on again/off again" news of lockdowns continues," said Dennis Kissler, senior vice president of trading at BOK Financial.

Gasoline and diesel supplies remain uncomfortably low, he added, limiting the downside for crude prices as most of the United States braces for major cold weather.

The ICE exchange, home to the Brent benchmark, has increased the initial margin rates for front-month Brent crude futures by 4.92%, making maintaining a futures position more expensive from the close of business on Tuesday.

Market participants, worried high inflation and rising interest rates could spark a global recession, will also watch US consumer price data on Friday.

U.S. crude oil stocks were expected to have risen by about 1.1 million barrels last week, a preliminary Reuters poll showed on Monday.

The poll was conducted ahead of reports from the American Petroleum Institute due at 4:30 p.m. EST (2130 GMT) on Tuesday and the Energy Information Administration at 1530 GMT on Wednesday.

On the supply side, bullish signals remain in the near term.

The European Union ban on Russian oil, imposed in retaliation for Russia's invasion of Ukraine, is set to start on December 5 and will be followed by a halt on oil product imports in February. Moscow calls its actions in Ukraine "a special operation".