Oil prices dip on rise in virus cases; U.S. stock draw checks losses

* U.S. crude stockpiles drop, fuel inventories build - EIA
* Oil market outlook clouded by vaccine roll-out variables -
IEA
* China reports most new COVID-19 cases in more than 10
months

By Jessica Jaganathan
SINGAPORE, Jan 14 (Reuters) - Oil prices eased for a second
day on Thursday as mounting coronavirus cases globally raised
demand concerns, although a drawdown in U.S. crude stocks for a
fifth straight week capped losses.
Brent crude oil futures LCOc1 dipped 5 cents, or 0.1%, to
$56.01 a barrel by 0124 GMT, while U.S. West Texas Intermediate
(WTI) CLc1 fell by 1 cent to $52.90 a barrel.
"Oil market's sizzling rally likely took a hiatus as the
stronger dollar and the omnipresent gasoline supply overhang
offset the evaporating U.S. crude inventories," said Stephen
Innes, chief global market strategist at Axi.
U.S. crude oil stockpiles last week fell more than expected,
while gasoline and distillate inventories rose as refiners
ramped up output to its highest level since August, the Energy
Information Administration said on Wednesday. EIA/S
China, the world's second largest oil consumer, reported its
biggest daily jump in new COVID-19 cases in more than 10 months
as infections in northeastern Heilongjiang province nearly
tripled, underscoring the growing threat ahead of a major
national holiday.
Governments across Europe announced tighter and longer
coronavirus lockdowns on Wednesday due to a fast-spreading COVID
variant first detected in Britain and as vaccinations are not
expected to help much for another two to three months.
Oil producers face an unprecedented challenge to balance
supply and demand as factors including the pace and response to
COVID-19 vaccines cloud the outlook, an official with
International Energy Agency (IEA) said. Still, a hefty COVID-19 relief package, which U.S.
President-elect Joe Biden is due to unveil on Thursday, kept
losses in check.
Top oil exporter Saudi Arabia has cut supplies of
February-loading crude for some Asian buyers by up to a quarter,
sources told Reuters, which supported prices.