Oil falls after U.S. inventory build feeds oversupply fears

* U.S. crude stocks rise, against analysts f'cast of draw
* Worldwide COVID-19 cases cross 40 million, fuelling demand
fears
* Hopes for U.S. deal on coronavirus relief cap losses

By Yuka Obayashi
TOKYO, Oct 21 (Reuters) - Oil prices fell on Wednesday after
a surprise climb in U.S. crude stockpiles added to concerns
about a global supply glut as a spike in global COVID-19 cases
fuels demand fears and production returns in Libya.
Brent crude futures LCOc1 for December delivery were at
$42.94 a barrel, down 22 cents, or 0.5%, as of 0035 GMT, while
December U.S. West Texas Intermediate (WTI) crude CLc1 futures
slipped 23 cents, or 0.7%, to $41.47 a barrel.
Both benchmarks gained the previous session.
Crude inventories rose by 584,000 barrels in the week to
Oct. 16 to about 490.6 million barrels, data from industry group
the American Petroleum Institute showed, compared with analysts'
expectations in a Reuters poll for a draw of 1 million barrels.
API/S
Adding to pressure, worldwide COVID-19 cases crossed 40
million on Tuesday, with some parts of Europe imposing renewed
lockdown measures. "Higher U.S. inventory fuelled concerns of oversupply at a
time when the coronavirus cases are rising worldwide, which
could hamper a recovery in fuel demand," said Satoru Yoshida, a
commodity analyst with Rakuten Securities.
On the supply side, the Organization of the Petroleum
Exporting Countries (OPEC) and its allies, together known as
OPEC+, plan on scaling back their production cuts in January
from a current 7.7 million barrels per day (bpd) to roughly 5.7
million bpd in January.
OPEC member Libya, which is exempt from the cuts, is also
ramping up production after armed conflict shut almost all of
the country's output in January, pumping more oil into an
oversupplied market. Still, Russia's energy minister said on Tuesday it was too
early to discuss the future of global oil production curbs
beyond December, less than a week after saying plans to reduce
the output restrictions should proceed. "Hopes for economic stimulus in the United States and other
countries to combat pandemic-led slump in consumption are
expected to cap losses but planned reduction in output cuts by
OPEC+ will also limit any future gains," Yoshida said.
The White House and Democrats in the U.S. Congress moved
closer to agreement on a new coronavirus relief package on
Tuesday as President Donald Trump said he was willing to accept
a large aid bill despite opposition from his own Republican
Party.