UPDATE 6-Oil rises as economic data overshadows coronavirus worries

* U.S. EIA forecasts oil demand recovery
* Rise in Saudi OSPs could weigh on refining margins

(New throughout, updates prices, market activity and comments;
new byline, changes dateline, previous LONDON)
By Jessica Resnick-Ault
NEW YORK, July 7 (Reuters) - Oil prices edged higher on
Tuesday as the U.S. government forecast higher fuel demand and
lower production, overshadowing concerns that a surge in new
coronavirus cases will hamper a demand recovery.
"The market is popping because of the higher forecast
demand, and jobs data," said Phil Flynn, senior analyst at Price
Futures Group in Chicago.
Brent crude LCOc1 futures rose by 30 cents, or 0.7%, to
$43.41, by 12:26 p.m. EST (1726 GMT). Earlier, Brent fell to a
session low of $42.46. U.S. West Texas Intermediate (WTI) crude
CLc1 futures rose 27 cents, or 0.6%, to $40.90 a barrel,
having fallen as low as $39.90.
The U.S. Energy Information Administration (EIA), forecast
that global oil demand would recover through the end of 2021,
predicting demand of 101.1 million barrels per day (bpd) by the
fourth quarter of next year.
“Global oil demand continues to recover faster than
previously estimated," Linda Capuano, EIA administrator, said,
noting that global liquid fuels consumption in the second
quarter was down an average 16.3 million bpd from a year
earlier.
Oil prices also got a boost as equities edged higher after
the U.S. Labor Department's Job Openings and Labor Turnover
(JOLTS) survey for May showed the largest-ever monthly gain for
hirings.
Still, 16 U.S. states have reported record increases in new
COVID-19 cases in the first five days of July, according to a
Reuters tally.
Florida is reintroducing some limits on economic reopenings.
California and Texas also reported high infection rates.
Other parts of the world, such as Australia, have also been
hit by a resurgence in new infections. Saudi Arabia raised its August crude official selling prices
on Monday in a sign it sees demand picking up. But some analysts
said the move could weigh on already poor margins for refiners.
"While record output cuts from the Saudis and the rest of
OPEC+ support the idea of stronger differentials, this again
will not be welcome news for refiners, doing little to help
their margins, which are already under significant pressure,"
bank ING said.
The U.S. crude market faces some uncertainties from a court
decision on Monday ordering the shutdown of the Dakota Access
pipeline, the biggest artery transporting crude oil from North
Dakota's Bakken shale basin to the Midwest and Gulf Coast
regions, due to environmental concerns. Market sources in the Bakken said the closure of the
570,000-bpd pipeline, while an environmental impact statement is
completed, will likely divert some oil flows to transportation
by rail.