Oil price edges lower

LONDON, Aug 20 (Reuters): Oil prices edged lower on Tuesday on persisting concerns over demand, but optimism US-China trade tensions will ease and hopes major economies will take stimulus measures to ward off a potential economic slowdown capped losses.

Brent crude LCOc1 was down 19 cents to $59.55 a barrel by 1134 GMT while U.S. crude CLc1 was down 27 cents at $55.94 a barrel. Both contracts traded in positive territory earlier in the session.

The United States (US) said it would extend a reprieve that permits China's Huawei Technologies to buy components from U.S. companies, signaling a slight softening of the trade conflict between the world's two largest economies. The extension brought "relief to investors", Tamas Varga from oil brokerage PVM said.

"The US-China trade spat has been at the center of the oil market demise, which has sent the global economy to the brink of recession and negatively impacted oil demand forecasts," Stephen Innes, managing partner of VM Markets, said in a note.

Overall oil demand concerns continue to weigh on oil. The Organisation of the Petroleum Exporting Countries cut its forecast for global oil demand growth in 2019 by 40,000 barrels per day (bpd) to 1.10 million bpd and indicated the market would be in slight surplus in 2020.

A rally in equity markets around the world on growing expectations that global economies will take action against slowing growth also gave oil prices a floor.

China's new lending reference rate was set slightly lower on Tuesday after the central bank announced interest rate reforms designed to reduce corporate borrowing costs.