UPDATE 6-Oil slips amid surging virus cases and U.S.-China tensions

* U.S. prepares new sanctions on Chinese officials - sources
* Widespread coronavirus lockdowns strengthened
* Iran plans to raise exports if sanctions ease

(Updates prices, market activity; changes byline, dateline,
previously LONDON)
By Stephanie Kelly
NEW YORK, Dec 7 (Reuters) - Oil prices slipped on Monday as
the positive impact from COVID-19 vaccine news and an OPEC+ deal
on oil production cuts was undermined by surging coronavirus
cases and heightened tensions between the United States and
China.
Brent crude LCOc1 fell 16 cents to $49.09 a barrel by
11:17 a.m. EST (1617 GMT). U.S. crude CLc1 fell 18 cents to
$46.08 a barrel.
Both oil contracts gained around 2% last week after OPEC+,
comprising of the Organization of the Petroleum Exporting
Countries (OPEC) and its allies, agreed to increase output
slightly from January but continue the bulk of existing supply
curbs. "The beginning of this week is like the morning hangover
following a good night out that went a bit too far," said
Bjornar Tonhaugen, head of oil markets at Rystad Energy. "With
the OPEC deal in the bag, now traders looked back at
fundamentals, demand and supply, and they were forced to come
back to earth as things are not looking good in the short-term."
Prices also were under pressure after Reuters exclusively
reported that the United States was preparing to impose
sanctions on at least a dozen Chinese officials over their
alleged role in Beijing's disqualification of elected opposition
legislators in Hong Kong. Rising tensions between the United States and China, the
world's top oil consumers, have weighed repeatedly on the market
in recent years.
Meanwhile, a surge in coronavirus cases globally has forced
a series of renewed lockdowns, including strict new measures in
the U.S. state of California and in Germany and South Korea.
U.S. gasoline consumption fell during the Thanksgiving
holiday week to the lowest in more than 20 years, OPIS said, as
lockdowns weighed on fuel consumption. Elsewhere, Iran has instructed its oil ministry to prepare
installations for the production and sale of crude oil at full
capacity within three months, state media said on Sunday.

"Adding to the pressure on oil prices is the potential
Iranian increase to production in three months," said Edward
Moya, senior market analyst at OANDA. "Iran is optimistic the
U.S. will ease restrictions if they return back to the 2015
nuclear deal."