Oil prices slip, but supported by hopes trade tensions could ease

* Stocks gain on stimulus cheer, trade optimism
* OPEC sees bearish oil market for rest of 2019
* Coming up: API data on U.S. crude stockpiles at 0830 GMT

By Jessica Jaganathan
SINGAPORE, Aug 20 (Reuters) - Crude oil prices slipped on
Tuesday, but losses were limited as equity markets rallied and
as traders hoped Sino-U.S. trade tensions would ease.
The United States said it would extend a reprieve that
permits China's Huawei Technologies HWT.UL to buy components
from U.S. companies, in a sign of a slight softening of the
trade war between both countries.
Brent crude LCOc1 had slipped 3 cents, or 0.05%, to $59.71
a barrel by 0147 GMT, after rising 1.88% on Monday.
U.S. crude CLc1 was down 15 cents, or 0.3%, at $56.06 a
barrel, after gaining 2.44% in the previous session.
The extension sets a very "comforting tone" ahead of next
month's U.S.-China trade talks, Stephen Innes, managing partner,
VM Markets, said in a note.
"The U.S.-China trade spat has been at the centre of the oil
market demise, which has sent the global economy to the brink of
recession and negatively impacted oil demand forecasts," he
said.
A rally in equity markets around the world from growing
expectations that global economies would take action to
counteract slowing growth also supported oil prices, which often
follow stocks. MKTS/GLOB
China's central bank unveiled interest rate reforms which
are expected to lower corporate borrowing costs, while Germany's
right-left coalition government said it would be prepared to
ditch its balanced budget rule and take on new debt to counter a
possible recession. Meanwhile, a Reuters poll of seven analysts showed that
crude oil inventories in the United States fell by 1.9 million
barrels in the week to Aug. 16.
The poll was conducted ahead of reports from the American
Petroleum Institute (API), an industry group, and the Energy
Information Administration (EIA), an agency of the U.S.
Department of Energy.
The API is scheduled to release its data on Tuesday.
Still, prices were weighed down by a report from the
Organization of the Petroleum Exporting Countries (OPEC) that
stoked concerns about growth in oil demand. OPEC cut its forecast for global oil demand growth in 2019
by 40,000 barrels per day (bpd) to 1.10 million bpd and
indicated the market would be in slight surplus in 2020.
Traders were also watching for signs of tension in the
Middle East after the U.S. called the release of an Iranian
tanker at the centre of an angry confrontation between Iran and
Washington unfortunate and warned Greece and Mediterranean ports
against helping the vessel.