UPDATE 9-Oil touches multi-week highs as OPEC signals it may extend cuts

* Producers want to drive down oil inventories -Saudi oil
minister
* OPEC+ considers moving oil policy meeting to early July
-sources
* Trump, Saudi Arabia warn Iran against Middle East conflict

(Updates with settlement prices, market activity)
By Stephanie Kelly
NEW YORK, May 20 (Reuters) - Oil prices on Monday rose to
multi-week highs before easing later in the session as OPEC
indicated it was likely to maintain production cuts that have
helped boost prices this year, while escalating Middle East
tensions provided further support.
U.S. West Texas Intermediate crude futures CLc1 rose 34
cents to settle at $63.10 a barrel, after hitting $63.81, the
highest price since May 1.
Brent crude futures LCOc1 fell 24 cents to settle at
$71.97 a barrel, having earlier touched $73.40, their highest
since April 26.
Saudi Energy Minister Khalid al-Falih said on Sunday there
was consensus among the Organization of the Petroleum Exporting
Countries (OPEC) and allied oil producers to drive down crude
inventories "gently" but he would remain responsive to the needs
of what he called a fragile market. The comments gave an early boost to oil prices on Monday,
but futures pared gains throughout the session.
"Nothing substantial has gone out further, so the gain is
leaking out of the market," said Gene McGillian, vice president
of market research at Tradition Energy in Stamford, Connecticut.
"The market doesn't want to get too far ahead of itself.
OPEC, Russia and other non-member producers, an alliance
known as OPEC+, agreed to cut output by 1.2 million barrels per
day (bpd) from Jan. 1 for six months to try to prevent
inventories from increasing and weakening prices.
A gathering of the so-called Joint Ministerial Monitoring
Committee (JMMC) in Saudi Arabia over the weekend did not make
any solid recommendations.
OPEC and its allies are due to meet in Vienna on June 25-26
for their next oil policy meeting. However, the group is
considering moving the date to July 3-4, two OPEC sources said
on Monday. The date change has not been officially confirmed,
the sources said. United Arab Emirates Energy Minister Suhail al-Mazrouei
earlier told reporters that producers were capable of filling
any market gap and that relaxing supply cuts was not the right
decision. OPEC data indicated oil inventories in the developed world
rose by 3.3 million barrels month-on-month in March, and were
22.8 million barrels above their five-year average. Adding to the bullish sentiment were rising tensions in the
Middle East.
U.S. President Donald Trump threatened Tehran on Sunday,
tweeting that a conflict would be the "official end" of Iran,
while Saudi Arabia said it was ready to respond with "all
strength" and it was up to Iran to avoid war. The rhetoric follows last week's attacks on Saudi oil assets
and the firing of a rocket on Sunday into Baghdad's heavily
fortified "Green Zone" that exploded near the U.S. embassy.
Britain told Iran on Monday not to underestimate the resolve
of the United States, warning that if American interests were
attacked then the Trump administration would retaliate.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
GRAPHIC: U.S. Rig count png https://tmsnrt.rs/2X8Myf7
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>