Brent futures for February fell 26 cents, or 0.3%, to $83.00 a barrel by 0430 GMT, while U.S. crude fell 26 cents, or 0.3%, to $78.70 a barrel.
The scale of the latest outbreak and doubts over official data prompted some countries to enact new travel rules on Chinese visitors, even as China began dismantling the world's strictest COVID regime of lockdowns and testing.
"The lack of clarity over the virus situation in China has prompted some new travel rules from various countries, which could serve as some dampener for previous optimism," said Jun Rong Yeap, market strategist at IG.
"Heading into 2023, there are chances for oil prices to rebound but it will still boil down to the pace of China's reopening, and whether market participants have priced for the growth risks as a trade-off to tighter central bank policies," he added.
Oil markets were also buffeted by expectations of another U.S. interest rate increase in the United States, as the Federal Reserve tries to limit price rises in a tight labour market.
U.S. crude oil inventories fell less than expected, by about 1.3 million barrels, in the week ended Dec. 23, according to market sources citing American Petroleum Institute figures.
That compared with estimates for a draw of 1.5 million barrels, according to analysts' estimates. The U.S. government will release its weekly figures at 10:30 a.m. EST on Thursday.
Also weighing on prices, pipeline operator TC Energy said it was working to restart the portion of the Keystone pipeline that was shut down after a leak this month. However, that comes as an Arctic freeze has forced some oil refining facilities offline, backing up crude supplies.
Oil refiners continued to ramp up operations, but some of that recovery is expected to extend to January.
Markets, however, drew some support from Russian President Vladimir Putin's ban on exports of crude oil and oil products from Feb. 1 for five months to nations that abide by a Western price cap.
Germany said the ban has "no practical significance" as the country has been working since spring to replace Russian oil supplies and ensure security of supply.
More about:
