Oil prices slipped on Friday and were set for a weekly decline due to mounting worries about the impact on fuel demand of a widespread resurgence in coronavirus infections, as well as some concern about the likely return of exports from Libya.

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Brent crude was down 4 cents at $41.90 a barrel by 0635 GMT, while U.S. West Texas Intermediate (WTI) crude dropped 8 cents to $40.23.

Brent is heading for a drop of nearly 3% this week with U.S. crude on track for a decline of around 2%. Both benchmarks are also heading for a monthly decline, which would be the first for Brent in six months.

"The outlook for oil demand remains challenging as prospects of new mobility restrictions continue to rise," ANZ Research said in a note.

In the United States, which has the highest death toll from the coronavirus pandemic and is the world`s biggest oil consumer, unemployment claims unexpectedly rose last week suggesting an economic recovery is flailing and pushing down fuel demand.

U.S. fuel demand remains in the doldrums as the pandemic constrains travel. The four-week average of gasoline demand last week was 9% below a year earlier, government data showed on Wednesday.

In other parts of the world, daily increases of coronavirus infections are hitting records and new restrictions are being put in place that will likely limit travel and fuel demand.

In India, throughput by crude oil refiners in August fell 26.4% from a year ago, the most in four months, as fuel demand ebbed because surging coronavirus cases hindered industrial and transport activity.

The profit from producing fuels from benchmark Dubai crude at a refinery in Singapore was 26 cents a barrel on Thursday, down from $8.03 a year earlier.

In Libya, an oil tanker was loading a cargo on Thursday from one of three Libyan terminals that were reopened in recent days and more cargoes are expected to be lifted in the coming days.

However, analysts have questioned how quickly the country could ramp up supply.

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"Fundamentally, nothing has changed to the supply side of the equation that is weighing on oil prices in the bigger picture," said Jeffrey Halley, senior market analyst at OANDA.