UPDATE 8-Oil falls on rising Libya output, coronavirus surge

* Vaccine unlikely to boost oil demand until well into 2021
-IEA
* Brent, WTI on track for second weekly gain
* U.S. oil rigs rise to highest since May -Baker Hughes

(Updates to settlement)
By Devika Krishna Kumar
NEW YORK, Nov 13 (Reuters) - Oil prices fell about 2% on
Friday, pressured by swelling output from Libya and fears that
rising coronavirus infections may slow the recovery in the
global economy and fuel demand.
Hopes for a vaccine kept crude futures on track for a second
straight weekly gain.
Brent crude LCOc1 fell 75 cents, or 1.7%, to settle at
$42.78 a barrel. U.S. West Texas Intermediate (WTI) crude
futures CLc1 fell 99 cents, or 2.4%, to end the session at
$40.13 a barrel. For the week, both notched gains of more than
8%.
Libyan oil production has risen to 1.2 million barrels per
day (bpd), a Libyan oil source told Reuters, up from the 1.0
million bpd reported on Nov. 7 by the country's National Oil
Corp.
Signs of rising production in the U.S. added to bearish
sentiment. U.S. oil rigs rose 10 to 236 this week, according to
Baker Hughes data, their highest since May.
Also pressuring prices, U.S. government data showed crude
inventories rose by 4.3 million barrels last week. Analysts had
expected a draw of 913,000 barrels. EIA/S
"In essence, some of the feel-good factor from the Pfizer
vaccine has worn off and disappointing EIA figures have created
a bit of a downward correction," Harry Tchilinguirian, head of
commodity research at BNP Paribas, said.
"However, OPEC+ is prepared to tweak its production and
we're still waiting for the trial results of other vaccines that
may be easier to distribute since they won't need such cold
storage."
New coronavirus infections in the United States and
elsewhere are at record levels and tightening restrictions
should lead to fuel demand recovering more slowly than many had
hoped. WTI and Brent contracts jumped this week after data showed
an experimental COVID-19 vaccine being developed by Pfizer Inc
PFE.N and Germany's BioNTech 22UAy.DE was 90% effective.

But on Thursday, the International Energy Agency (IEA) said
global oil demand was unlikely to get a significant boost from
vaccines until well into 2021. "It's no surprise that the market is trimming the price
gains today as realities for crude supply and demand are grim,
while daily new Covid-19 cases in the U.S. are setting new
records for the third-straight day," Bjornar Tonhaugen, head of
oil markets at Rystad, said.
"Our crude and liquids balances suggest oil prices need to
go lower before they go higher."
Analysts say tougher restrictions on mobility to deal with
sky-rocketing coronavirus cases mean the Organization of the
Petroleum Exporting Countries and its allies may hesitate to
loosen output curbs as planned in January.
The group known as OPEC+ is due to hold a Joint Ministerial
Monitoring Committee next week, which will give some indications
of what the producers may decide at the next ministerial meeting
on Dec. 1.
Algeria's energy minister said this week that OPEC+ could
extend the group's current oil production cuts into 2021 or
deepen them further if required.