* Iran rejects talks with Washington
* Potential for Iran attacks 'put on hold,' -acting Pentagon
chief
* U.S. crude oil stocks rise unexpectedly last week -API
* Global markets hit by U.S.-China trade dispute
(Adds API U.S. oil storage report)
By Laila Kearney
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 LCOc1 settled at $72.18 a barrel,
gaining 21 cents.
U.S. West Texas Intermediate (WTI) crude futures CLc1
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. API/S EIA/S
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. 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 .DXY 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.