* Brent and WTI reverse early gains, settle down
* U.S. crude oil stocks rise 4.1 mln bbls-API
* Iraq and Ecuador unrest offers some price support
* Growing recession risk caps oil upside -analyst
(New throughout, adds API data and post-settlement trade)
By Devika Krishna Kumar
NEW YORK, Oct 8 (Reuters) - Oil prices slid on Tuesday as
Washington's blacklisting of more Chinese companies dampened hopes for
a trade deal between the two countries, although unrest in Iraq and
Ecuador lent some support to crude prices.
Early in the session, both Brent crude and West Texas
Intermediate (WTI) rose more than 1%. But at settlement, Brent was
down 11 cents, or 0.2% at $58.24 a barrel while WTI fell 12 cents,
or 0.2%, at $52.63.
Prices extended losses slightly in post-settlement trade after
American Petroleum Institute data showed U.S. crude inventories rose
by 4.1 million barrels in the week ended Oct. 4, far surpassing the
1.4 million barrels analysts had forecast.
Investors were cautious ahead of U.S.-China trade talks in
Washington on Thursday. U.S. President Donald Trump said a quick trade
deal was unlikely.
Washington is moving ahead with discussions over possible
restrictions on capital flows into China, with a focus on investments
by U.S. government pension funds, Bloomberg reported.
The U.S. Energy Information Administration (EIA) cut its 2020
world oil demand growth forecast by 100,000 barrels per day (bpd) to
The oil market "will be forced to focus more succinctly on
global oil demand deterioration as it negotiates through the monthly
series of agency reports the rest of this week," Jim Ritterbusch,
president of Ritterbusch and Associates, said in a note.
Oil prices were also pressured by an unexpected decline in U.S.
producer prices in September, which could give the Federal Reserve
room to cut interest rates again this month.
U.S. stocks tumbled and the pan-European STOXX 600 index
International Monetary Fund (IMF) Managing Director Kristalina
Georgieva warned that global economic deceleration could turn into
"a more massive slowdown" without action to resolve trade
conflicts and support growth.
"The market's focus remains on trade tensions and oil demand
concerns, ignoring the elevated geopolitical tensions in the Middle
East and lower OPEC production in September," said UBS oil
analyst Giovanni Staunovo. "Growing recession risks have capped
the upside of oil prices."
Official weekly data from the U.S. EIA is due Wednesday at 10:30
a.m. ET. Analysts forecast crude inventories in the United States
would show a fourth week of growth while gasoline stocks fell, a
Reuters poll showed on Monday.
The EIA said U.S. crude production is expected to rise by 1.27
million bpd in 2019 to a record 12.26 million bpd, slightly above its
previous forecast for a rise of 1.25 million.
Oil prices drew some support from protests in OPEC members Iraq
and Ecuador which threatened to disrupt their oil output.
In Iraq, protests resumed overnight in Baghdad's Sadr City
"Unrest in Iraq gained a high profile at the start of October
as a result of large protests in Baghdad," RBC analyst Al Stanton said.
He said potential attacks by Turkey on Kurdish forces in northeast
Syria could take place close to the Iraqi border, leading to "a
refugee crisis that puts pressures on Kurdistan’s economy" and
its oil production.
Turkey said it had completed preparations for a military operation
in northeast Syria after the United States began pulling back troops.
Ecuador's energy ministry said protests against austerity could
reduce its oil output by 59,450 bpd.
Saudi Arabia reiterated that it was ready to meet global oil
needs. Installations belonging to Saudi Aramco were attacked on Sept.
14, hitting output and triggering a spike in oil prices.
Major Oil Supply Diruptions png
(Additional reporting by Bozorgmehr Sharafedin in London and Florence
Tan in Singapore; Editing by Nick Zieminski, Bill Berkrot and David Gregorio)
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