Oil prices slip as demand worries outweigh OPEC supply cuts

* OPEC extends oil output curbs by 9 months until March 2020
* But slowing global economy seen sapping demand for oil
* Higher U.S. production also drags on oil prices

By Jessica Jaganathan
SINGAPORE, July 2 (Reuters) - Oil prices slipped on Tuesday
as worries that a weakening global economy would dent demand for
the commodity outweighed OPEC's decision to extend supply cuts
until next March.
Brent crude futures LCoc1 for September delivery had
dropped 33 cents, or 0.5%, to $64.73 a barrel by 0034 GMT. They
climbed more than $2 a barrel on Monday before paring gains
later in the day.
U.S. crude futures for August CLc1 had fallen 48 cents, or
0.8%, to $58.61 a barrel, after touching their highest in over
five weeks on Monday.
"After 2-1/2 years of production cuts, the effects of
rolling over production cuts is losing steam," said Edward Moya,
senior market analyst at OANDA in New York, adding that markets
remained nervous on how demand will pan out over the next few
months.
"The trade war is not likely to get resolved any time soon
and while central banks globally are expected to deliver fresh
stimulus in the coming months, economic activity is continuing
to trend lower."
The U.S.-China trade conflict has pressured global markets,
stoking worries about demand for commodities such as crude oil.
The Organization of the Petroleum Exporting Countries (OPEC)
agreed on Monday to extend oil supply cuts until March 2020 as
the group's members overcame their differences in order to try
to prop up the price of crude. OPEC is slated to meet with Russia and other producers, an
alliance known as OPEC+, later on Tuesday to discuss supply cuts
amid surging U.S. output.
Russian President Vladimir Putin said on Saturday he had
agreed with Saudi Arabia to extend global output cuts of 1.2
million barrels per day, or 1.2% of world demand, until December
2019 or March 2020.
Russia reduced oil production in June by more than the
amount agreed in a global deal to cut output, the energy
minister and industry sources said on Monday, as the sector
still felt the impact of a contaminated crude crisis that
crippled exports. Oil prices have also come under renewed pressure in recent
months from rising U.S. supplies.
U.S. producers hit a monthly record of 12.16 million barrels
per day (bpd) in April, the latest available data showed, though
new U.S. shale oil production is expected to slip this year from
last year, according to a survey of major forecasters.