* Brent holds above $41, WTI stuck below $40
* Libya's talks to resume oil exports progress
* Surprising China factory activity cushions drop
(Adds Reuters poll, updates prices)
By Ahmad Ghaddar
LONDON, June 30 (Reuters) - Oil prices slipped on Tuesday
amid rising COVID-19 cases and a possible return of Libyan oil
production, which has been down to a trickle since the start of
the year.
The more-active September contract for Brent fell 37
cents, or 0.88%, to $41.48 a barrel by 1125 GMT, paring Monday's
92 cent gain. The August contract, which expires on
Tuesday, fell 43 cents to $41.28.
U.S. crude was down 45 cents, or 1.13%, at $39.25 a
barrel.
"Attempts to push prices higher are capped by growing
concerns about the second cycle of the coronavirus or the
inability to contain the current one," Tamas Varga of oil
brokerage PVM said.
Coronavirus cases continue to rise in southern and
southwestern U.S. states.
Investors are watching to see whether Libya is able to resume
exports, which have been almost entirely blockaded since January
amid the country's civil war.
"If we do finally see a resumption in Libyan output, this
would make the job of OPEC+ a little bit more difficult, as
Libya pumped at around 1 million barrels per day (bpd) prior to
the disruptions." ING said.
Investors will also be looking for signs of demand recovery
in data due on Tuesday from the American Petroleum Institute
industry group and from the U.S. government on Wednesday.
A preliminary Reuters poll showed analysts expect U.S. crude
oil stockpiles fell from record highs last week and gasoline
inventories decreased for a third straight week.
Royal Dutch Shell, the world's largest fuel
retailer, said it expects a 40% drop in fuel sales in the second
quarter from a year earlier to 4 million bpd.
Stronger-than-expected Chinese factory data, and a drop in
Iraq's June oil exports helped cap bigger losses.
Oil prices will consolidate at around $40 a barrel this
year, with a recovery gaining steam in the fourth quarter and
into 2021, a Reuters poll showed on Tuesday.
(Additional reporting by Sonali Paul in Melbourne and Koustav
Samanta in Singapore; Editing by Edmund Blair and Louise
Heavens)
