CORRECTED-UPDATE 10-Oil rises 2% on U.S. Gulf shutdowns, outlook weak

(Corrects OPEC+ planned production from January to roughly 5.7
million bpd in paragraph 7)
* U.S. offshore Gulf oil cut 16% ahead of storm
* Libyan output to reach 1 million bpd in weeks
* U.S. crude inventories expected to rise -poll
* Coming Up: API oil data at 4:30 p.m. ET/2030 GMT

By Laura Sanicola
NEW YORK, Oct 27 (Reuters) - Crude settled higher on Tuesday
as companies shut down some U.S. Gulf of Mexico oil production
ahead of an approaching storm, although surging coronavirus
infections and rising Libyan supply limited gains.
Companies including BP BP.L , Chevron CVX.N , Shell
RDS.L and Equinor ASA EQNR.OL evacuated rigs or closed
facilities. So far producers have shut 16%, or 294,000 barrels
per day (bpd) of oil output due to Zeta, which weakened to a
tropical storm on Tuesday from a hurricane on Monday, the U.S.
National Hurricane Center (NHC) said. Brent crude LCOc1 closed up 75 cents, or 1.9%, at $41.21
per barrel by 1:22 EDT (1722 GMT). U.S. oil CLc1 gained $1.01
cents, or 2.6%, to $39.57. Both contracts fell more than 3% on
Monday.
The storm-induced bump in prices may be short-lived,
however, with demand expected to weaken anew with coronavirus
cases rising.
"We have a lot of weakness...no vaccine, no stimulus, and
the very real possibility of a contested election in a couple
days, and a stock market that won't react positively to that,"
said Bob Yawger, director of energy futures at Mizuho.
Libya's production should rebound to 1 million bpd in coming
weeks, complicating efforts by other OPEC members and allies to
restrict output.
The Organization of the Petroleum Exporting Countries and
allies, known as OPEC+, are planning to increase production by 2
million bpd from January after record output cuts this year.
That would take overall reductions to roughly 5.7 million bpd -
still an enormous amount by the standards of major oil
producers, but it may not be enough to offset weak demand.
Russian President Vladimir Putin, speaking last Thursday,
did not rule out extending the cuts for longer.
"As the virus continues to spread, the odds of additional
OPEC + production tends to diminish in helping to provide some
balance to the market," said Jim Ritterbusch, president of
Ritterbusch and Associates.
The latest weekly U.S. oil inventory figures, due later on
Tuesday and on Wednesday, are expected to show rising supplies.
Analysts polled by Reuters expect crude stocks to rise by about
1.1 million barrels. EIA/S