UPDATE 9-Oil pulls back after hitting highest since early March

* US crude stocks rise 1.7 mln barrels to record high last
wk-API
* Prices pare gains following U.S. PMI report
* Prices up early on Trump tweet about China trade

(Adds price reaction after weekly U.S. inventory data from API)
By Scott DiSavino
NEW YORK, June 23 (Reuters) - Oil futures slipped on Tuesday
as the market braced for reports expected to show swelling U.S.
crude inventories, which pulled prices back off the highest
levels since before the coronavirus pandemic slammed fuel
demand.
Prices rose early, after U.S. President Donald Trump wrote
in a tweet late Monday that the trade agreement with China was
"fully intact". Markets had been unsettled by surprise comments
from White House trade adviser Peter Navarro that the hard-won
deal with China was "over".
But crude benchmarks declined in afternoon trade on
expectations U.S. inventories will hit a record high for a third
week in a row, undermining recent bullishness among investors.
Brent LCOc1 futures fell 45 cents, or 1.0%, to settle at
$42.63 a barrel, while U.S. West Texas Intermediate (WTI) crude
fell 36 cents, or 0.9%, to $40.37.
Oil extended losses in post-settlement trade after U.S.
crude inventories rose by a much bigger than expected 1.7
million barrels last week, according to the American Petroleum
Institute, an industry group. That compares with analysts'
expectations for a 300,000-barrel build. U.S. government data
will be released on Wednesday. API/S EIA/S ENERGYUSA
ENERGYAPI
Earlier in the day, both contracts traded at their highest
since prices collapsed on March 6 after the Organization of the
Petroleum Exporting Countries (OPEC) and allied producers,
including Russia, failed to agree on production cuts. Prices
tumbled even further when the pandemic slashed fuel demand.
"It appears we ran into some technical resistance after
closing the March 6 gap ... and then we saw some profit taking,"
said John Kilduff, partner at Again Capital LLC in New York.
U.S. crude stocks rose to 539.3 million barrels USOILC=ECI
in the week to June 12, an all-time high, and are expected to
have increased by 300,000 barrels in the week to June 19,
according to a Reuters poll. EIA/S
Also weighing on crude prices, analysts said the market was
unimpressed with purchasing managers reports in the United
States, which showed the country's rebound from
coronavirus-depressed levels was not as sharp as in Europe.
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GRAPHIC: U.S. crude oil drilling rigs https://tmsnrt.rs/2Z1Z3LZ
White House adviser Navarro walks back on comments China trade
deal 'over' ID:nL1N2E0050
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