Oil little changed as US-Iran dispute supports, trade war weighs
NEW YORK, May 21 (Reuters) - Oil futures were steady on Tuesday as the prospect of mounting U.S.-Iran tensions disrupting supply was offset by concerns that a lengthy trade war between Washington and Beijing would limit crude demand.
Brent crude futures settled at $72.18 a barrel, gaining 21 cents.
U.S. West Texas Intermediate (WTI) crude futures settled at $62.99 a barrel, down 11 cents ahead of the front month contract for June delivery expiring on Tuesday. The July contract settled at $63.13 a barrel.
WTI fell slightly in post-settlement trade following industry group the American Petroleum Institute's data showing that U.S. crude stockpiles rose unexpectedly last week, by 2.4 million barrels, compared with analysts' expectations for a decrease of 599,000 barrels.
The market will next watch for the U.S Energy Information Administration oil stockpiles report due on Wednesday morning.
"I think the market is taking a breath, waiting to see how inventories respond to refiners in the U.S. returning back from maintenance," said Andy Lipow, president of Lipow Oil Associates in Houston.
Crude prices were caught in limbo mainly due to counteracting disputes between the United States and other nations, analysts said.
"The situation with China is as bearish as the Iran situation is bullish," said John Kilduff, a partner at Again Capital LLC in New York. "That's why I think we continue to be here in a stalemate."
U.S. President Donald Trump on Monday threatened Iran with "great force" if it attacked U.S. interests in the Middle East.
On Tuesday, acting U.S. Defense Secretary Patrick Shanahan said that while threats from Iran remained high, deterrence measures taken by the Pentagon had "put on hold" the potential for attacks on Americans. He did not provide details.
Washington suspects that militia with ties to Iran organized a rocket attack in Iraq's capital Baghdad.
Iran said it would resist U.S. pressure, declining further talks under current circumstances.
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Tensions have mounted in an already tight market as the Organization of the Petroleum Exporting Countries, Russia and other producers have withheld supply to support prices since the start of the year in a six-month agreement.
Saudi Arabia on Sunday indicated there was consensus among OPEC and allied oil producers to continue limiting supplies.
Also adding to market tightness was the closure of a major pipeline in Nigeria and Russia supply disruptions.
The prolonged tariff fight between the United States and China raised concerns about a global economic slowdown, however.
Signs that Asian economies were already being hit by the trade conflict helped to boost the U.S. dollar to a four-week high, making crude more expensive for much of the world.
Disappointing U.S. economic data that showed existing home sales fell for a second straight month also hampered crude demand sentiment. (Additional reporting by Henning Gloystein in Singapore; Editing by Marguerita Choy and Sonya Hepinstall)