UPDATE 9-Oil dips on COVID-19 resurgence, fears of more supply

Reuters

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    * Both benchmarks a shade firmer for the week
    * Some European countries revive coronavirus curfews
    * OPEC+ fears second virus wave could lead to oil surplus in
2021
    * U.S. oil and gas rig count rises by most since January

 (Adds CFTC data)
    By Stephanie Kelly
    NEW YORK, Oct 16 (Reuters) - Oil prices edged lower on
Friday, dragged down by concerns that a spike in COVID-19 cases
in the United States and Europe will continue to drag on demand
in two of the world's biggest fuel-consuming regions.
    OPEC+, a grouping of the Organization of the Petroleum
Exporting Countries and allied producers including Russia, fear
a prolonged second wave of the pandemic and a jump in Libyan
output could push the oil market into surplus next year,
according to a confidential document seen by Reuters, a much
gloomier outlook than just a month ago.  urn:newsml:reuters.com:*:nL8N2H726T 
    Brent crude futures  LCOc1  fell 23 cents to settle at
$42.93 a barrel, and U.S. West Texas Intermediate (WTI) crude
futures dropped 8 cents to settle at $40.88 a barrel.
    Brent rose 0.2% for the week, while WTI was on track to gain
0.7%.
    "The reality is that we're now seeing a pretty active spread
of the pandemic across Europe and it's spreading again in North
America, and that potentially will weigh on oil demand
recovery," said Lachlan Shaw, head of commodity research at the
National Bank of Australia.
    Some European countries were reviving curfews and lockdowns
to fight a surge in new coronavirus cases, with Britain imposing
tougher COVID-19 restrictions in London on Friday.
 urn:newsml:reuters.com:*:nL8N2H61D2 urn:newsml:reuters.com:*:nS8N2GJ04M  urn:newsml:reuters.com:*:nL1N2H61BJ
    A panel of officials from OPEC+, called the Joint Technical
Committee, discussed their worst-case scenario during a virtual
monthly meeting on Thursday. That involved commercial
inventories from major world consumers remaining higher than the
five-year average in 2021, rather than falling below that mark.
    The group's Joint Ministerial Monitoring Committee (JMMC),
will consider the outlook when it meets on Monday. The JMMC can
make a policy recommendation.
    "We expect on Monday's meeting some strong words on
compensating for (members') undercompliance," said Paola
Rodriguez-Masiu, Rystad Energy's senior oil markets analyst.
"What everybody is wondering is if there will be any action
against the laggards this time or if the bashing will stay at a
verbal level."
    OPEC+ is set to ease its current supply cuts of 7.7 million
barrels per day (bpd) by 2 million bpd in January.  urn:newsml:reuters.com:*:nL8N2H636B
    In the United States, drillers have begun adding oil rigs
since cutting them to a 15-year low in August. This week, they
added the most oil rigs in a week since January, increasing the
count by 12 to 205, energy services firm Baker Hughes Co  BKR.N 
said.  RIG-USA-BHI ,  RIG-OL-USA-BHI ,  RIG-GS-USA-BHI 
 urn:newsml:reuters.com:*:nL1N2H30PF
    Money managers cut their net long U.S. crude futures and
options positions by 9,442 contracts to 288,454 in the week to
Oct. 13, the U.S. Commodity Futures Trading Commission (CFTC)
said on Friday.  urn:newsml:reuters.com:*:nAQN038S3L

 (Reporting by Stephanie Kelly in New York; additional reporting
by Dmitry Zhdannikov in London, Yuka Obayashi in Tokyo and
Florence Tan in Singapore
Editing by David Goodman, Louise Heavens, David Gregorio and Tom
Brown)
 ((Stephanie.Kelly@thomsonreuters.com; 646-223-4471; Reuters
Messaging: stephanie.kelly.thomsonreuters.com@reuters.net))

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