UPDATE 6-Oil prices slide as glut overshadows vaccine optimism

* Explosion hits oil tanker in Saudi port of Jeddah
* U.S., Britain roll out COVID-19 vaccine deliveries
* Germany to widen lockdowns as it battles COVID-19
* U.S. energy rigs rise the most since January -Baker Hughes

(Adds comments, updates prices, changes dateline to NEW YORK;
previous LONDON)
By Devika Krishna Kumar
NEW YORK, Dec 14 (Reuters) - Oil prices fell on Monday as
persistent oversupply in the market overshadowed hopes that a
rollout of coronavirus vaccines will lift global fuel demand.
Brent crude futures LCOc1 for February fell 61 cents, or
1.2%, to $49.36 a barrel by 11:12 a.m. ET (1612 GMT), while U.S.
West Texas Intermediate crude futures CLc1 for January were
down 71 cents, or 1.5%, at $45.86 a barrel.
Signs of rising supply have weighed on the market. Libyan
oil production stood at 1.28 million barrels per day on Monday,
a National Oil Corporation (NOC) source said, up from 1.25
million bpd in late November. In the United States, energy firms last week added the most
oil and natural gas rigs in a week since January as producers
continued to return to the wellpad.
Global onshore crude inventories in December are still well
above 2019 and 2018 levels, market intelligence firm Kpler said,
with the biggest onshore builds this year seen in China .
"Whilst the sharp jump of global stocks from the beginning
of the Covid pandemic in spring to summer mirrored anemic fuels
demand early this year, a still historic high volume of crude
oil stocks indicates worldwide demand hasn't yet bounced back to
pre-Covid levels," the firm said in a note.
Major European countries continued in lockdown mode to curb
the spread of COVID-19 which has reduced fuel demand. For
example, Germany, the fourth largest economy in the world, plans
to impose a stricter lockdown from Wednesday to battle the
virus.
Prices gained earlier in the session amid supply jitters
after a shipping firm said an oil tanker was hit in the Saudi
port of Jeddah, which the energy ministry called a terrorist
act. "Traders have for years now been used to tensions flaring in
the region and when that happens, oil markets tick up," said
Bjornar Tonhaugen, Rystad Energy's head of oil markets.
"(The blast) has caused concerns for stability in the major
oil hub of Jeddah and for overall traffic security in the
region."
Brent and WTI have rallied for six consecutive weeks, their
longest stretch of gains since June.
The United States kicked off its vaccination campaign
against COVID-19, lifting hopes that pandemic restrictions could
end soon and lift demand in the world's largest oil consumer.
"Brent crude is supported by both financial and physical
flows. The dollar is declining, the Brent crude curve is in
backwardation and vaccines are being rolled out," said SEB chief
commodity analyst Bjarne Schieldrop.
"We think that this rally has further to go."