Oil edges up after steep fall; OPEC cuts, stocks draw support

* OPEC, allies extend output curbs until March 2020
* U.S. crude oil inventories fall 5 mln bbls-API
* Morgan Stanley lowers long-term Brent price forecast

By Jessica Jaganathan
SINGAPORE, July 3 (Reuters) - Oil prices edged higher on
Wednesday, steadying after a more than 4% fall in the previous
session, as extended output cuts by OPEC and its allies helped
underpin prices despite growing concerns about weak demand.
An expected large draw in crude oil inventory in the United
States also buoyed sentiment after a bigger-than-expected fall
in inventories in a private survey.
Brent crude futures LCoc1 for September delivery were
trading up 48 cents, or 0.8%, at $62.88 a barrel by 0053 GMT.
U.S. crude futures for August CLc1 were up 37 cents, or
0.7%, at $56.62 a barrel. Both benchmarks fell sharply on
Tuesday as worries about a slowing global economy overshadowed
OPEC supply cuts.
The Organization of the Petroleum Exporting Countries and
other producers such as Russia, a group known as OPEC+, agreed
on Tuesday to extend oil supply cuts until March 2020 as members
overcame differences to try to prop up prices. "The OPEC+ meeting showed the members sticking together in
tough times, characterized by weakening global demand outlook,
aiming for a more balanced oil market, despite clear market
share implications," said Amarpreet Singh, analyst at Barclays
Commodities Research in a note.
"This is supportive of oil prices, in our view, even as the
market remains squarely focused on weak macro signals."
Ahead of government data due later on Wednesday, industry
group the American Petroleum Institute (API) said that U.S.
crude inventories fell by 5 million barrels last week, more than
the expected decrease of 3 million barrels.
EIA/S
Still, signs of a global economic slowdown hitting oil
demand growth worried investors after global manufacturing
indicators disappointed and the U.S. opened another trade front
after threatening the EU with more tariffs to offset government
aid to the aviation industry.
Barclays expects demand to grow at its slowest pace since
2011, gaining less than 1 million barrels per day year-on-year
this year.
Morgan Stanley, meanwhile, lowered its long-term Brent price
forecast on Tuesday to $60 per barrel from $65 per barrel, and
said the oil market is broadly balanced in 2019.