UPDATE 11-Oil dives 4% on demand worries even as OPEC, allies extend cuts

* OPEC, allies extend output curbs until March 2020
* Slowing global economy seen sapping oil demand
* U.S., China agreed to restart trade talks at G20
* U.S. crude oil inventories fall 5 mln bbls-API

(Updates with API data on crude stockpiles)
By Stephanie Kelly
NEW YORK, July 2 (Reuters) - Oil prices fell more than 4% on
Tuesday, even after OPEC and allies including Russia agreed to
extend supply cuts until next March, as weak manufacturing data
had investors worried that a slowing global economy could dent
oil demand.
Brent crude LCOc1 futures fell $2.66, or 4.1%, to settle
at $62.40 a barrel. U.S. West Texas Intermediate (WTI) crude
CLc1 futures fell $2.84, or 4.8%, to settle at $56.25 a
barrel, after touching their highest in more than five weeks on
Monday.
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 extension comes after Russian President Vladimir Putin
said on Saturday he had agreed with Saudi Arabia to prolong the
pact and continue to cut combined production by 1.2 million
barrels per day, or 1.2% of world demand.
Signs of a global economic slowdown, which could hit oil
demand growth, means OPEC and its allies could face an uphill
battle to shore up prices by reining in supply.
"It was the bare minimum OPEC could agree on in order to
prevent a major meltdown in prices. Member countries noted that
global oil demand growth for this year has fallen to 1.14 mbpd
(million barrels per day) while non-OPEC supply is expected to
grow by 2.14 mbpd," PVM analyst Tamas Varga wrote in a note.
"It appears that the supply side of the oil equation is
supportive for oil prices but demand concerns are forcing oil
bulls to keep at least part of their gunpowder dry."
The United States and China agreed at the G20 summit to
restart trade talks, but factory activity shrank across much of
Europe and Asia in June while U.S. manufacturing activity slowed
to near a three-year low. Further, U.S. President Donald Trump on Monday said any deal
would need to be somewhat tilted in favor of the United States,
which stoked doubt over prospects for a trade deal between the
top two economies. "Increasing indications of global economic slowing remain as
the larger negative pricing consideration to the energy complex
and OPEC's need to extend production cuts even further would
appear to attest to slowing economic growth paths," Jim
Ritterbusch of Ritterbusch and Associates said in a note.
Meanwhile, U.S. crude inventories fell by 5 million barrels
in the week to June 28 to 469.5 million, industry group the
American Petroleum Institute said on Tuesday. Analysts had
expected a decrease of 3 million barrels. Government data is due to be released on Wednesday. EIA/S