CORRECTED-UPDATE 6-Oil flat as U.S.-Iran tensions support prices, trade war weighs

Reuters

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 (Corrects forecast for U.S. crude inventory data in last
paragraph)
    * Iran's Rouhani rejects talks with Washington
    * OPEC expected to continue supply cuts into H2 2019
    * Global markets hit by U.S.-China trade dispute
    * Coming Up: U.S. API storage report at 4:30 p.m. EDT/2030
GMT

    By Laila Kearney
    NEW  YORK, May 21 (Reuters) - Oil futures held steady on
Tuesday, supported by U.S.-Iran tensions and expectations of
ongoing OPEC supply cuts but under pressure from concerns about
a drawn-out trade war between Washington and Beijing.
    Brent crude futures  LCOc1 , the international benchmark for
oil prices, rose 1 cent to $71.98 a barrel by 11:01 a.m. EDT
(1501 GMT).
    U.S. West Texas Intermediate (WTI) crude futures  CLc1  were
unchanged at $63.21 a barrel, as the WTI contract for June
delivery expired. The July contract was trading at $63.19 a
barrel.
    "The two powerful countervailing forces in the market right
now are the Iran tensions versus the deteriorating U.S.-China
trade war situation," said John Kilduff, a partner at Again
Capital LLC in New York. 
    The trade war "really hits the Asian economies and the
demand outlook, and this situation with Iran has the market on
tenterhooks at the same time," Kilduff said.
    On Monday, U.S. President Donald Trump threatened Iran with
"great force" if it attacked U.S. interests in the Middle East.
Washington suspects that militia with ties to Iran organized a
rocket attack in Iraq's capital Baghdad.
 urn:newsml:reuters.com:*:nL5N22W5IG urn:newsml:reuters.com:*:nL5N22W4PN
    On Tuesday, Iran said it would resist U.S. pressure,
declining further talks under current circumstances.
 urn:newsml:reuters.com:*:nL5N22X01X
    Iraq's oil minister said a growing conflict in the Middle
East poses a challenge to the stability of crude oil markets and
said the Organization of the Petroleum Exporting Countries
(OPEC) must pave the way for a "new agreement" to help
stability.  urn:newsml:reuters.com:*:nS8N1ZN09O
    Tensions have mounted during an already tight market as the
OPEC, Russia and other producers have withheld supply to support
prices.
    Saudi Arabia has signaled its willingness to continue
curbing output until the end of the year. OPEC will meet at the
end of June or in early July.  urn:newsml:reuters.com:*:nL5N22W53A urn:newsml:reuters.com:*:nL4N22W02K
    Also adding to market tightness was the closure of a major
pipeline in Nigeria and supply disruptions from Russia.
 urn:newsml:reuters.com:*:nL5N22X2CJ  urn:newsml:reuters.com:*:nL5N22W3V1
    The prolonged tariff fight between the United States and
China, however, raised concerns about a global economic slowdown
and dampened market sentiment. 
    Signs that Asian economies were already getting hit by the
trade conflict helped to boost the U.S. dollar  .DXY , making
crude more expensive.  urn:newsml:reuters.com:*:nL5N22X4FE
    The market will watch weekly U.S. crude stockpiles reports
on Tuesday afternoon from the American Petroleum Institute (API)
and Wednesday morning from the U.S Energy Information
Administration (EIA).
    Analysts in a Reuters poll forecast a 2.5 million-barrel
crude drawdown for last week.  EIA/S 

 (Additional reporting by Henning Gloystein in Singapore;
Editing by Louise Heavens and David Gregorio)
 ((Laila.kearney@thomsonreuters.com, (917) 809-0054))

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