UPDATE 7-Oil slips as U.S. posts surprise rise in crude inventories

* U.S. crude stockpiles rise unexpectedly -EIA
* U.S. tells China to shut Houston consulate
* Trump shifts tone with coronavirus warning

(Updates with settlement prices)
By Jessica Resnick-Ault
NEW YORK, July 22 (Reuters) - Oil prices edged lower on
Wednesday as government data showed a surprise rise in U.S.
crude inventories and as tensions escalated between the United
States and China.
Brent crude futures LCOc1 settled down 3 cents at $44.29 a
barrel, while U.S. West Texas Intermediate crude CLc1 settled
down 2 cents at $41.90 a barrel.
U.S. crude and distillate inventories rose unexpectedly and
fuel demand slipped in the most recent week, the Energy
Information Administration said on Wednesday, as the sharp
outbreak in coronavirus cases has started to hit U.S.
consumption.
Crude inventories USOILC=ECI rose by 4.9 million barrels
in the week to July 17 to 536.6 million barrels, compared with
expectations in a Reuters poll for a 2.1 million-barrel drop.
Production rose to 11.1 million barrels per day, up by 100,000
barrels per day. EIA/S
“Overall, this would suggest that the demand recovery we've
seen from the bottom seems to be stalling," said Phil Flynn,
senior analyst at Price Futures group in Chicago.
President Donald Trump said on Tuesday that the outbreak
would probably worsen before it got better, a shift from his
previously robust emphasis on reopening the economy.
Bjornar Tonhaugen, Rystad Energy's head of oil markets, said
Trump's comments might be welcomed by investors because they are
among the most measured by him or his administration so far.
"This could be a positive for oil demand prospects. Instead
of an uncontrolled, disruptive second wave of lockdowns, maybe
chances have now increased that the United States will
eventually get the spread under control," Tonhaugen said.
However, a fresh dispute between Washington and Beijing put
pressure on prices after the United States told the Chinese
consulate in Houston to shut and a source said China was
considering closing the U.S. consulate in Wuhan. Adding to pressure were signs that Iraq, the second-largest
producer in the Organization of the Petroleum Exporting
Countries, was still not meeting its target under an OPEC-led
pact to cut supplies. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Oil Demand Second Coronavirus Wave Scenario https://tmsnrt.rs/2DtSrz8
World's top producers slash output https://tmsnrt.rs/3g56mcX
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