CORRECTED-Oil prices drop for 4th day as COVID-19 second wave worries intensify

(Corrects OPEC+ Jan supply cut to 5.8 million bpd, not 5.7
million bpd in paragraph 7)
By Sonali Paul
MELBOURNE, Oct 20 (Reuters) - Oil prices slipped for a
fourth straight day on Tuesday on worries about a resurgence of
coronavirus cases globally stifling a promising recovery in fuel
demand, while growing output from Libya adds to plentiful supply
in the market.
Brent crude LCOc1 futures fell 30 cents, or 0.7%, to
$42.32 a barrel by 0149 GMT, after falling 31 cents on Monday.
U.S. West Texas Intermediate (WTI) crude CLc1 futures slid
26 cents, or 0.6%, to $40.57 a barrel, after losing 5 cents on
Monday.
COVID-19 cases topped 40 million on Monday, according to a
Reuters tally, with a growing second wave in Europe and North
America having sparked new clampdowns.
"Since April we have seen a miraculous recovery in oil
demand – which is now at about 92% of pre-pandemic levels, but
it's too early to declare an end to the COVID-19 oil demand
destruction era," said Rystad Energy oil markets analyst Louise
Dickson.
A meeting on Monday of a ministerial panel of the
Organization of the Petroleum Exporting Countries (OPEC) and its
allies, together called OPEC+, pledged to support the oil market
as concerns grow over soaring infections. For now OPEC+ is sticking with a deal to curb output by 7.7
million barrels per day (bpd) through December, and then shaving
the cuts back to 5.8 million bpd in January.
Three sources from producing countries said the planned
output increase from January could be reversed if necessary.
"We don't think oil markets are in a position to absorb the
around 2% of global supply that OPEC+ are expected to restart
from 1 January, 2021," Commonwealth Bank commodities analyst
Vivek Dhar said in a note.
He said rising output from Libya, which is operating outside
the OPEC+ pact, was adding to oversupply concerns.
Libya is rapidly ramping up production after armed conflict
shut almost all of the country's output in January. Output from
its biggest field, Sharara, which reopened on Oct. 11, is now at
around 150,000 bpd, or about half its capacity, two industry
sources told Reuters. Meanwhile traders will be watching for crude and product
inventory data from the American Petroleum Institute on Tuesday.
Analysts expect U.S. crude oil and distillate stockpiles likely
fell in the latest week, according to a Reuters poll.