UPDATE 7-Oil edges lower, shrugging off Gulf of Mexico shut-ins

* Hurricane shuts 21% of U.S. Gulf oil production -
regulator
* Bleak economic recovery dampens sentiment
* Possible Libya output resumption to add more supply

(Adds settlement prices)
By Jessica Resnick-Ault
NEW YORK, Sept 14 (Reuters) - Oil prices slipped slightly on
Monday amid concerns about a stalled global economic recovery
and with Libya poised to resume production, and failed to get
support from an impending storm which has disrupted U.S. output.
Brent crude LCOc1 settled down 22 cents, or 0.6%, at
$39.61 a barrel while U.S. West Texas Intermediate (WTI) crude
futures CLc1 were down 7 cents, or 0.2%, at $37.26 a barrel.
Both contracts ended last week lower, falling for a second
week in a row.
"The storm is taking production offline in the Gulf of
Mexico, and the market doesn't care - that shows just how bad
the situation is," said Bob Yawger, director of energy futures
for Mizuho in New York.
Hurricane Sally gained in strength in the Gulf of Mexico,
west of Florida on Sunday and was poised to become a category 2
hurricane.
The storm forced energy firms to shut 21.4%, or 395,790
barrels per day (bpd), of offshore crude oil production in the
northern Gulf of Mexico, the U.S. government said on
Monday. The storm is disrupting oil production for the second time
in less than a month after Hurricane Laura swept through the
region.
Typically oil prices rise when production is shut down, but
with the coronavirus pandemic getting worse, demand concerns are
to the fore, while global supplies continue to rise.
The path towards global fuel demand recovery is likely to be
rocky, several senior industry executives said. "(Coronavirus) infection rates are on the rise again, there
are localized lockdowns introduced in a growing number of
countries hindering regional economic growth and the number of
unemployed is failing to fall significantly," oil broker PVM's
Tamas Varga said.
"This leads to dismal oil demand growth."
The Organization of the Petroleum Exporting Countries said
on Monday that world oil demand would tumble by 9.46 million
barrels per day (bpd) this year, a sharper decline than it
predicted in a report a month ago. In Libya, commander Khalifa Haftar committed to ending a
months-long blockade of oil facilities, a move that would add
more supplies to the market. "If Libya's production comes back online soon, we are
talking about 1 million barrels per day or more, this will be a
significant addition to the global balances. And the market is
pricing this in today," said Bjornar Tonhaugen, head of oil
markets at Rystad Energy.
OPEC and its allies, a grouping known as OPEC+, meets on
Sept. 17 to discuss compliance with deep cuts in production,
although analysts do not expect further reductions to be made.

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CHART: U.S. oil may bounce into $37.90-$38.44 range before
falling Brent oil may fall to $38.44 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>