(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 , 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 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.
On Tuesday, Iran said it would resist U.S. pressure, declining
further talks under current circumstances.
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.
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.
Also adding to market tightness was the closure of a major
pipeline in Nigeria and supply disruptions from Russia.
The prolonged tariff fight between the United States and China,
however, raised concerns about a global economic slowdown and dampened
Signs that Asian economies were already getting hit by the trade
conflict helped to boost the U.S. dollar , making crude more
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.
(Additional reporting by Henning Gloystein in Singapore; Editing by
Louise Heavens and David Gregorio)
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