Oil prices dip on swelling U.S. crude stocks, but global markets still tight

* U.S. oil output, stock & drilling: https://tmsnrt.rs/2DwTUBQ
* Slowing oil demand also weighs on prices
* OPEC cuts, Middle East tension keep markets on edge

By Henning Gloystein
SINGAPORE, May 23 (Reuters) - Oil prices dipped on Thursday,
extending bigger falls from the previous session, as surging
U.S. crude inventories and weak demand from refineries weighed
on markets.
However, oil markets still remain relatively well supported
by supply cuts led by the OPEC producer cartel and by political
tension in the Middle East.
Brent crude futures LCOc1 , the international benchmark for
oil prices, were at $70.90 per barrel at 0007 GMT, down 9 cents,
or 0.1 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were
down by 3 cents at $61.39 per barrel.
Crude futures fell by around 2 percent the previous day.
"Rising inventories and a slowdown with refined product
demand could suggest we could see further pressure (on prices),"
said Edward Moya, senior analyst at futures brokerage OANDA.
U.S. crude oil inventories rose last week, hitting their
highest levels since July 2017, due to weak refinery demand, the
Energy Information Administration said on Wednesday.
Commercial U.S. crude oil inventories rose by
4.7 million barrels in the week ended May 17, to 476.8 million
barrels, their highest since July 2017, the EIA data showed.
Beyond weak refinery demand for feedstock crude oil, the
increase in commercial inventories also came on the back of
planned sales of U.S. strategic petroleum reserves (SPR) into
the commercial market.
U.S. crude oil production C-OUT-T-EIA rose by 100,000
barrels per day (bpd), to 12.2 million bpd, putting output near
its record of 12.3 million bpd reached late last month.
Ole Hansen, head of commodity strategy at Saxo Bank, said
"concerns about slowing (oil) demand growth due to the negative
impact on the global economy of the U.S.–China trade war" were
also weighing on oil prices.
Countering these bearish price factors have been escalating
political tensions between the United States and Iran, as well
as ongoing supply cuts led by the Organization of the Petroleum
Exporting Countries (OPEC) that started in January in an effort
to prop up the market.
"Large but opposing forces have kept Brent in a $70-$75 per
barrel range in recent weeks," Morgan Stanley said in a note on
oil markets published this week.
"Macro economic data has rapidly deteriorated, and this is
reflected in weaker oil demand. At the same time, downside risk
to supply is materialising in key countries," which the U.S.
bank said would add to OPEC's supply cuts.
"On balance, however, we still see tightness in 2H19,"
Morgan Stanley said, adding it expected Brent to trade in the
$75-$80 per barrel range in the second half of 2019.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
U.S. oil drilling, production & storage levels https://tmsnrt.rs/2DxgF8W
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>