Oil prices slip on surprise gain in U.S. inventory, demand worries

* Crude oil stocks up by 2 mln bbls last week - API
* U.S. COVID-19 immunisation rollout expands
* Coming up: EIA oil inventory data at 1530GMT

By Jessica Jaganathan
SINGAPORE, Dec 16 (Reuters) - Oil prices dropped on
Wednesday on a surprise gain in crude oil inventories in the
United States and as investors continued to worry about demand
for fuel being squeezed amid tighter lockdowns in Europe to
counter the coronavirus pandemic.
Brent crude LCOc1 futures fell 8 cents, or 0.2%, to $50.68
a barrel at 0126 GMT, while U.S. West Texas Intermediate (WTI)
crude CLc1 futures fell 6 cents, or 0.1%, to $47.56 a barrel.
"Crude prices are slightly softer after the API (American
Petroleum Institute) inventory report posted a second
consecutive build," said Edward Moya, senior market analyst at
OANDA.
Crude inventories swelled by 2 million barrels in the week
to Dec. 11 to about 495 million barrels, according to industry
group API. API/S
Analysts had expected a draw of 1.9 million barrels,
according to a Reuters poll. Official government data was
scheduled for Wednesday.
The rollout of vaccines this month to combat the coronavirus
pandemic will not quickly reverse the destruction wrought on
global oil demand, International Energy Agency (IEA) warned on
Tuesday.
The IEA revised down its estimates for oil demand this year
by 50,000 barrels per day (bpd) and for next year by 170,000
bpd, citing scarce jet fuel use as fewer people travel by air.
"On the demand side, the biggest near-term downside risk to
oil demand expectations is the United States, predominately due
to persistent weaknesses in U.S. gasoline demand, given the
current trajectory of COVID-19 in the country," analysts at FGE
wrote in a note.
Still, progress on vaccine rollouts continued on Tuesday
after Moderna Inc's MRNA.O COVID-19 vaccine appeared set for
U.S. regulatory authorisation this week. The U.S. also expanded on Tuesday its rollout of the newly
approved COVID-19 vaccine developed by Pfizer Inc PFE.N and
German partner BioNTech SE BNTX.O to hundreds of additional
distribution centres on Tuesday, inoculating thousands more
healthcare workers in a mass immunisation expected to reach the
general public in the coming months.