UPDATE 7-Oil prices inch up on Iran tensions and OPEC cuts

* Brent, WTI set for biggest weekly drop in 5 weeks
* Losses checked by OPEC+ output cut extension

(New throughout, updates prices, market activity, comments)
By Laila Kearney
NEW YORK, July 5 (Reuters) - Oil prices climbed on Friday,
supported by tensions over Iran and a decision by OPEC and its
allies to extend an output supply cut deal until next year, but
mixed economic data limited the rally.
Brent LCOc1 was up $1.08, or 1.7%, to $64.38 a barrel by
2:02 p.m. EDT (1802 GMT). U.S. West Texas Intermediate (WTI)
CLc1 gained 15 cents to $57.49 a barrel. The U.S. market was
closed on Thursday for a national holiday, and WTI trade volumes
remained light on Friday.
Both benchmarks were set to record weekly losses as concerns
about a slowing global economy outweighed risks to supply.
"We've got mixed data – weak manufacturing data from around
the globe, but then we have a strong job numbers in the U.S.,"
said Phil Flynn, an analyst at Price Futures Group in Chicago.
German industrial orders fell far more than expected in May,
and the Economy Ministry said this sector of Europe's largest
economy was likely to remain weak in coming months. The U.S. Labor Department said nonfarm employers added
224,000 jobs last month, the most in five months, easing fears
about weakening global demand for crude. However, new orders for
U.S. factory goods fell for a second straight month in May,
government data showed, stoking economic concerns. The U.S. Energy Information Administration reported on
Wednesday a weekly decline of 1.1 million barrels in crude
stocks, smaller than the 5 million barrel draw reported by the
American Petroleum Institute and less than analysts had
forecast. USOILC=ECI
The Organization of the Petroleum Exporting Countries and
other producers such as Russia, known as OPEC+, supported prices
by extending their deal on supply cuts. Tension in the Middle East also offered support,
particularly to Brent. "Brent is pricing in more of the
geopolitical risk than WTI," Flynn said.
Iran threatened on Friday to capture a British ship after
British forces seized an Iranian tanker in Gibraltar over
accusations the ship was violating EU sanctions on Syria.
"It is just another sign that the market sentiment is not
strong enough to react to those headlines and events, which is
quite unusual," Petromatrix oil analyst Olivier Jakob said.
A Reuters survey found OPEC oil output sank to a new
five-year low in June, as a rise in Saudi supply did not offset
losses in Iran and Venezuela due to U.S. sanctions and other
outages elsewhere in the group.