UPDATE 6-Oil prices fall on U.S. inventory data, concerns about demand

* Oil falls nearly 1.0%
* U.S. stockpiles fall by less than expected
* Signs of global slowdown raise market concerns
* But supply cut pact by OPEC and allies tightens supply

(Updates prices)
By Nia Williams
CALGARY, Alberta, July 4 (Reuters) - Oil prices fell in thin
trade on Thursday, weighed down by data showing a
smaller-than-expected draw on U.S. crude stockpiles and worries
about the global economy.
Front-month Brent crude futures LCOc1 , the international
benchmark for oil prices, settled down 52 cents or 0.81% at
$63.30 per barrel. Brent closed up 2.3% on Wednesday.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were
down 54 cents or 0.94% at $56.89 per barrel. WTI closed up 1.9%
on Wednesday.
Trading volumes were light due to the July 4 holiday in the
United States.
Markets appeared largely unmoved by the detention by British
Royal Marines of a supertanker in Gibraltar possibly carrying
Iranian crude oil bound for Syria, as tensions between Iran and
the United States have flared over mysterious attacks on tankers
in the Gulf of Oman in recent months. The U.S. Energy Information Administration on Wednesday
reported a weekly decline of 1.1 million barrels in crude
stocks, much smaller than the 5 million barrel draw reported by
the American Petroleum Institute earlier in the week.
USOILC=ECI "The inventory data by no means argue in favour of higher
prices: not only did the crude oil inventory reduction prove
smaller than expected – it also fell noticeably short of that
reported by the API the day before," Commerzbank wrote in a note
to clients.
U.S. inventories fell less than expected as U.S. refineries
last week consumed less crude than the week before and processed
2% less oil than a year ago, the EIA data showed, despite being
in the midst of the summer gasoline demand season.
That suggests oil demand in the United States, the world's
biggest crude consumer, could be slowing amid signs of a
weakening economy. New orders for U.S. factory goods fell for a
second straight month in May, government data showed on
Wednesday, adding to the economic concerns. The weak U.S. data followed a report of slow business growth
in Europe last month as well. "Tossing aside the short-term nature of fluctuations around
the inventory data, it's impossible to escape the economic
reality that we are in the midst of a global manufacturing
downturn," said Stephen Innes, managing partner, Vanguard
Markets.
Uncertainty over demand, however, was offset slightly by the
outlook for global supply.
Output will stay limited as the Organization of the
Petroleum Exporting Countries and other producers such as
Russia, a group known as OPEC+, agreed on Tuesday to extend oil
production cuts until March 2020.