UPDATE 8-Oil deepens slide on recession fears, China's trade threats

* Brent falls as much as 3% for a second consecutive session
* China says has to take counter-measures to latest U.S.
tariffs
* WTI discount to Brent at narrowest since March 2018

(Adds comment, settlement prices)
By Devika Krishna Kumar
NEW YORK, Aug 15 (Reuters) - Oil prices fell more than 1% on
Thursday, extending the previous session's 3% drop, pressured by
mounting recession concerns and China's threat to impose
counter-measures in retaliation for the latest U.S. tariffs on
$300 billion of Chinese goods.
In a sign of investor concern that the world's biggest
economy could be heading for recession, the U.S. Treasury bond
yield curve inverted on Wednesday for the first time since 2007.
China's on Thursday vowed to counter the latest U.S.
tariffs, but called on the United States to meet it halfway on a
potential trade deal, as U.S. President Donald Trump said any
pact would have to be on America's terms.
A trade war between to the world's two largest economies has
roiled global markets and fueled worries about a slowdown in oil
demand growth.
Brent crude LCOc1 fell as much as $1.81, or 3%, to $57.67
a barrel. The global benchmark ended the session down $1.25, or
2.1%, at $58.23 and West Texas Intermediate crude (WTI) CLc1
settled down 76 cents, or 1.4%, to $54.47.
"Oil is getting whacked again as risk-aversion again kicks
in and fears of a trade war inflicted slowdown grip traders,"
said Craig Erlam, senior market analyst at OANDA.
"WTI had enjoyed a decent rebound over the last week but
failed at the first hurdle, running into resistance around the
mid-July lows before plunging once again."
The price of Brent is still up 10% this year thanks to
supply cuts led by the Organization of the Petroleum Exporting
Countries and allies such as Russia, a group known as OPEC+.
In July, OPEC+ agreed to extend oil output cuts until March
2020 to prop up prices. A Saudi official on Aug. 8 indicated
more steps may be coming, saying "Saudi Arabia is committed to
do whatever it takes to keep the market balanced next year."
But the efforts of OPEC+ have been outweighed by worries
about the global economy amid the U.S.-China trade dispute and
uncertainty over Brexit, as well as rising U.S. stockpiles of
crude and higher output of U.S. shale oil.
"The market is becoming very anxious about global growth,"
said Tamas Varga of oil broker PVM.
China reported disappointing data for July, including a
surprise drop in industrial output growth to a more than 17-year
low. A slump in exports sent Germany's economy into reverse in
the second quarter. Meanwhile, a second week of unexpected rises in U.S. crude
inventories is adding to the pressure. EIA/S
U.S. crude stocks USOILC=ECI grew by 1.6 million barrels
last week, compared with expectations for a drop of 2.8 million
barrels, the Energy Information Administration (EIA) said.
Providing some support to U.S. crude prices, inventories at
Cushing, Oklahoma, the delivery point for WTI, fell by about 2
million barrels in the week to Aug. 13, traders said, citing
data from market intelligence firm Genscape.
That helped narrow U.S. crude's discount to Brent
WTCLc1-LCOc1 by over 16% to as little as $3.55 a barrel, the
smallest level since March 2018.
Also differentiating Brent from WTI is the looming OPEC
report, said Bob Yawger, director of energy futures at Mizuho in
New York.
"People are really anxious about OPEC's monthly report which
is coming out tomorrow, particularly about non-OPEC supply
increasing and about 2020 global oil demand taking a hit," he
said.

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TECHNICALS: U.S. oil may fall to $52.98 Brent oil may retest support at $58.13
U.S. crude inventories, weekly changes since 2017 https://tmsnrt.rs/2XlX17b
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