UPDATE 9-Oil falls on dim OPEC demand outlook, pares gains from Gulf of Mexico storm

Reuters

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    * Intensifying storm cuts half U.S. Gulf Coast oil output
    * OPEC sees lower 2020 demand for its oil, points to surplus
    * British tanker incident highlights Middle East tensions

 (Updates with settlement prices, adds market activity,
commentary)
    By Stephanie Kelly
    NEW YORK, July 11 (Reuters) - Oil prices fell on Thursday as
OPEC forecast slower demand for its crude next year, with crude
futures easing from their highest in more than a month after
U.S. producers cut about half of their output in the Gulf of
Mexico ahead of what could be one of the first major storms of
the Atlantic hurricane.
    Brent crude  LCOc1  futures fell 49 cents to settle at
$66.52 a barrel. During the session, they hit their highest
since May 30 at $67.65 a barrel.
    U.S. West Texas Intermediate (WTI) crude  CLc1  futures fell
23 cents to settle at $60.20 a barrel, after hitting their
highest since May 23 at $60.94. 
    Oil firms shut more than 1 million barrels per day of oil
production, 53% of Gulf of Mexico's output, as Tropical Storm
Barry intensified on Thursday.  urn:newsml:reuters.com:*:nL2N24C1DA  urn:newsml:reuters.com:*:nL2N24C0N7
 urn:newsml:reuters.com:*:nL2N24B0L0
    Phillips 66  PSX.M  said it expected to complete the closing
of its 253,600-bpd Alliance, Louisiana, refinery because of the
storm threat. 
    The storm, which could become a hurricane this week, was on
a path through the north central Gulf of Mexico.
    "Every storm is different," said Phil Flynn, an analyst at
Price Futures Group in Chicago. "There are still a lot of
questions to be answered, whether it's going to do damage to the
supply side or going to do more damage to the demand side."
    The Organization of the Petroleum Exporting Countries gave
its first 2020 forecasts in a monthly report, saying the world
would need 29.27 million bpd of crude from its 14 members next
year, down 1.34 million bpd from this year.  urn:newsml:reuters.com:*:nS8N1ZH05W
    The forecast points to the return of a surplus despite an
OPEC-led pact to restrain supplies, and was seen as a drag on
prices.
    Investors also eyed tensions in the Middle East. A day after
Iran warned Britain would face "consequences" over the seizure
of an Iranian oil tanker, three Iranian vessels tried to block
passage of a British ship run by BP  BP.L  through the Strait of
Hormuz, the British government said. They withdrew after
warnings from a British warship.  urn:newsml:reuters.com:*:nL8N24C1IP
    "We will note that this muted response to occasional events
in the Middle East is a result of the sizable amount of unused
Saudi production capacity and ample global crude supplies that
were further underscored in today's monthly OPEC report," Jim
Ritterbusch of Ritterbusch and Associates said in a note.

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
GRAPHIC: U.S. crude inventories, weekly changes since 2017    https://tmsnrt.rs/2XlX17b
GRAPHIC: U.S. Oil drilling and storage    https://tmsnrt.rs/2Ino7XU
TECHNICALS-U.S. oil may hover below $60.88     L4N24C0OZ 
TECHNICALS-Brent oil may retrace into $65.64-$66.09 range    
 L4N24C0C5 
Oil transport choke points    https://tmsnrt.rs/32kdoo5
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Additional reporting by Julia Payne and Bozorgmehr Sharafedin
in London and Aaron Sheldrick in Tokyo; Editing by Marguerita
Choy  and David Gregorio)
 ((Stephanie.Kelly@thomsonreuters.com; 646-223-4471; Reuters
Messaging: stephanie.kelly.thomsonreuters.com@reuters.net))

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