UPDATE 10-Oil flat as tropical storm limits output, glut forecasts weigh

Reuters

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    * U.S. Gulf of Mexico crude output cut by 59% -U.S.
government
    * IEA forecasts global oil surplus 
    * Iran calls on Britain to release seized tanker
    * U.S. oil drillers cut rigs for second week -Baker Hughes

 (Updates prices and market activity to settlement)
    By Laila Kearney
    NEW YORK, July 12 (Reuters) - Oil prices were little changed
on Friday as U.S. Gulf of Mexico crude output dropped by more
than half from disruptions caused by a tropical storm, but
concerns over a global crude surplus in the months ahead limited
gains.
    Brent crude  LCOc1  futures settled at $66.72 a barrel,
climbing 20 cents. U.S. West Texas Intermediate (WTI) crude
 CLc1  futures settled at $60.21 a barrel, up 1 cent.
    Brent has gained 4% this week while WTI posted a 4.7% rise.
Both benchmarks fell last week.
    Tropical Storm Barry, which is expected to become a
hurricane just before making landfall this weekend, boosted
crude futures as oil companies in the Gulf of Mexico sliced
production.  urn:newsml:reuters.com:*:nL2N24D114  urn:newsml:reuters.com:*:nL2N24D0NU  urn:newsml:reuters.com:*:nL2N24D0A5
    Nearly 59%, or 1.1 million barrels per day, of crude oil
production in the U.S.-regulated areas of the Gulf of Mexico has
been cut because of the storm, the U.S. Bureau of Safety and
Environmental Enforcement (BSEE) said. 
    "The crude oil market is being supported by the Gulf of
Mexico production shut-in. ... It is going to look to see if
Tropical Storm Barry becomes a major flooding event that impacts
the refining sector in Louisiana and impacts gas and diesel,"
said Andy Lipow, president of Lipow Oil Associates in Houston.  
    The International Energy Agency (IEA) forecast surging U.S.
oil output will outpace sluggish global demand and lead to a
large inventory build around the world in the next nine months.
 urn:newsml:reuters.com:*:nL8N24D1K7
    "The IEA report is tempering any price rise that we might
see from Tropical Storm Barry because the market continues to
stumble under the weight of slowing economic growth," Lipow
said.
    The world energy watchdog's report came a day after the
Organization of the Petroleum Exporting Countries predicted a
crude glut next year despite an OPEC-led pact to restrain
supplies. urn:newsml:reuters.com:*:nL8N24C35P
    The weekly U.S. oil rig count, an indicator of future
production, fell for the second straight week, General Electric
Co's  GE.N  Baker Hughes energy services firm said.  RIG/U 
Drillers cut four oil rigs in the week to July 12, reducing the
total to 784, the lowest since February 2018.
    The market remained on edge as tensions intensified between
Iran and the West. Tehran on Friday said Britain was playing a
"dangerous game" after last week's seizure of an Iranian tanker
on suspicion it was breaking European sanctions by taking oil to
Syria.  urn:newsml:reuters.com:*:nL8N24D0JV
    "Only time will tell whether this turns out to be a case of
wishful thinking, but one thing is clear: geopolitical risks are
here to stay," said Stephen Brennock, analyst at PVM Oil
Associates.

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
TECHNICALS-Brent oil may retest support at $66.40     L4N24D09P 
TECHNICALS-U.S. oil may retrace to $59.74      L4N24D0NB 
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Additional reporting by Borzorgmehr Sharafedin in LONDON, Jane
Chung in SEOUL and Koustav Samanta in SINGAPORE
Editing by David Goodman, Marguerita Choy, David Gregorio and
Jonathan Oatis)
 ((Laila.kearney@thomsonreuters.com; (917) 809-0054))

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