UPDATE 8-Oil rises as higher U.S. refinery rates offsets surprise crude build

* U.S. crude stocks up 7.9 mln bbls, vs 1.9 mln-bbl draw
forecast
* U.S. refinery runs rise, gasoline stocks unexpectedly
decline
* OPEC looks to extend record output cuts until the end of
2020
* OPEC still seeking support for output cuts from Russia
* UK, U.S. and others scold China for new Hong Kong security
law

(Adds latest prices, fresh quote)
By Scott DiSavino
NEW YORK, May 28 (Reuters) - Oil futures rose about 2% on
Thursday as a steady improvement in U.S. refining activity
offset a surprise build in crude and diesel inventories and on
worries that China's new Hong Kong security law could result in
trade sanctions.
Brent LCOc1 for July rose 55 cents, or 1.6%, to settle at
$35.29 a barrel on its second to last day as the front-month.
U.S. West Texas Intermediate (WTI) crude CLc1 rose 90 cents,
or 2.7%, to settle at $33.71.
That move in U.S. crude narrowed Brent's premium over WTI
WTCLc1-LCOc1 to its lowest since mid-April.
U.S. crude inventories rose 7.9 million barrels last week,
exceeding expectations, due to a big increase in imports from
Saudi Arabia, the Energy Information Administration (EIA) said.
The EIA's report, however, also showed refiners boosted
output and gasoline stockpiles fell unexpectedly, while crude
inventories at the U.S. Cushing storage hub in Oklahoma fell 3.4
million barrels. EIA/S
The market initially fell due to the big increase in crude
stocks, but switched into positive territory when it saw the
drawdown at the Cushing delivery point for WTI, said Bob Yawger,
director of energy futures at Mizuho in New York.
Oil prices have rebounded in recent weeks on anticipation of
improved demand after the coronavirus pandemic sapped worldwide
consumption by roughly 30%. Overall investment is dropping and
U.S. production cuts are balancing out the supply glut, but
demand still has not bounced back entirely.
Markets are also concerned Washington could slap trade
sanctions on China due to Beijing's move to impose a new
security law on Hong Kong. Uncertainty about Russia's commitment to continuing deep
output cuts kept the rally in check. Saudi Arabia and other OPEC
producers are considering an extension of record output cuts
until the end of 2020 but have yet to win support from Russia,
according to OPEC+ and Russian industry sources.