UPDATE 9-Oil bounces off 4-month low, ends up 1% as stock markets rally

* Stocks jump amid rate-cut hopes, tech shares' bounce
* U.S. crude oil stocks unexpectedly rise 3.5 mln bbls last
wk-API
* Analysts say economic slowdown starting to hit oil demand
* Russia's Rosneft seeks govt compensation for OPEC deal
extension
* Downturn hits oil, LNG and coal: https://tmsnrt.rs/2WJIky2

(Adds API data and post-settlement trade)
By Arpan Varghese
NEW YORK, June 4 (Reuters) - Oil prices ended as much as 1%
higher on Tuesday after a global stock market rally pulled Brent
crude from a four-month low touched earlier in the session.
U.S. stock markets rallied almost 2% on China's request for
dialogue with the United States to resolve the trade dispute and
comments from U.S. Federal Reserve Chairman Jerome Powell drove
expectations of an interest rate cut. MKTS/GLOB Brent futures LCOc1 gained 69 cents, or 1.1%, to settle at
$61.97 a barrel. The global benchmark fell as low as $60.21
earlier in the session, its lowest since Jan. 29.
U.S. West Texas Intermediate (WTI) crude CLc1 rose 23
cents, or 0.4%, to $53.48, rising over a dollar from its session
low.
Prices pared gains sharply, with WTI futures turning
negative, in post-settlement trade after U.S. crude inventories
unexpectedly rose 3.5 million barrels last week to 478 million,
along with bigger-than-expected builds in gasoline and
distillate fuels, according to data from industry group the
American Petroleum Institute. API/S
Analysts in a Reuters poll forecast a 800,000-barrel crude
draw ahead of the weekly petroleum report from the U.S. Energy
Information Administration (EIA) at 10:30 a.m. EDT on Wednesday.
"There is no shortage of crude oil inventories. Unless we
see an across-the-board inventory drop, crude and product prices
will remain under pressure," said Andrew Lipow, president of
Lipow Oil Associates in Houston, noting the oil price gains on
Tuesday were triggered by the stock market rally.
On Monday, Brent closed at its lowest since Jan. 28 and WTI
settled at its lowest since Feb. 12.
The oil market had been weighed down earlier in the session
by concerns about slowing global growth and comments from
Russia's top oil producer that it would oppose extending joint
cuts with the Organization of the Petroleum Exporting Countries
until the end of the year.
Financial traders have been selling off energy markets on
growing concerns about the outlook for the world economy amid
the trade war between the United States and China and U.S.
threats of tariffs on Mexican imports. "Today's oil disconnect from the exceptionally strong equity
trade appears to suggest that the oil market is more concerned
about global economic growth than the stock market," Jim
Ritterbusch of Ritterbusch and Associates said in a note.
Oil futures are trading around 20% below 2019 peaks reached
in late April, with May posting the sharpest monthly declines
since November.
Other energy prices, such as coal and gas, are also being
hit hard by the economic downturn. To prevent oversupply and prop up the market, OPEC, together
with allies including Russia, has withheld supply since the
start of the year.
The group plans to decide later this month or in early July
whether to continue the supply curbs. However, on Tuesday, the head of Russian state producer
Rosneft, Igor Sechin, said Russia should pump at will and he
would seek compensation from the government if cuts were
extended. Russia's average daily oil output, meanwhile, has dropped to
a three year-low after contaminated crude clogged its main
export route. Producers are concerned that the economic slowdown will
reduce fuel consumption.
Further pressuring oil prices and undermining OPEC's efforts
to tighten the market has been surging U.S. output to record
highs, leading to more of its crude being exported. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
GRAPHIC: Oil, coal & gas prices https://tmsnrt.rs/2WG0dO7
GRAPHIC: Russian, U.S. & Saudi crude oil production https://tmsnrt.rs/2EUHeFO
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