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UPDATE 1-Oil prices dip amid broader market selloff, despite tightening supplies

supplies@

* U.S. crude inventories are falling despite rising output

* Asia is showing signs of stronger demand in H2 2017 (Adds Asia demand detail in last 5 paragraphs, updates prices)

SINGAPORE, Aug 18 (Reuters) - Oil prices dipped on Friday as part of a broad-based selloff across markets, and despite signs that crude markets are gradually tightening.

Brent crude futures, the international benchmark for oil prices, were at $51 per barrel at 0414 GMT, down 3 cents from their last close. Brent is set for a 2.2 percent drop this week, the most the week ending July 7.

U.S. West Texas Intermediate (WTI) crude futures were at $47.06 a barrel, also down 3 cents. WTI is also set to drop for the week, down 3.6 percent, and also the most since the week ending July 7.

Oil traders said the crude falls came amid a selloff across many other markets, including U.S. and Asian stocks, where investors voted with their feet amid growing scepticism U.S. President Donald Trump, embroiled in controversy, would achieve his economic agenda.

The falls came despite signs, especially in the United States, that crude markets were gradually tightening.

Despite a 13 percent jump in production <C-OUT-T-EIA> since mid-2016 to 9.5 million barrels per day (bpd), the country's commercial crude inventories <C-STK-T-EIA> have fallen 13 percent from their March records to below 2016 levels.

"EIA data showed that stockpiles fell by 8.95 million barrels to 466.5 million barrels last week. This was the biggest weekly fall since September," ANZ bank said on Friday.

Going forward, much will depend on output levels from the Organization of the Petroleum Exporting Countries (OPEC) which, together with non-OPEC producers like Russia, has pledged to restrict output by 1.8 million barrels per day (bpd) between January this year and March 2018 to tighten the market and prop up prices.

So far, OPEC and Russian output remains high as some members who have pledged to cut are not complying with their targets.

On the demand side, Asia in particular could see some stronger crude orders going into the second half of the year, resulting in a tighter market.

Driven by the start-up of a new refinery in Yunnan province in southern China and the completed expansion of a fuel processing facility at Huizhou, analysts said they expect Chinese crude oil imports to pick up in the second half of the year.

"We expect Chinese crude imports to increase by 700,000 bpd y-o-y (year-on-year) on average in 2H 2017," energy consultancy FGE said.

New oil demand is also coming from Vietnam, which will see record crude oil imports in August as it readies its second refinery for start-up.

"As domestic crude production continues to fall, Vietnam's historical surplus in crude oil will come to an end by 2019, turning the country into a net importer of crude," said Peter Lee, oil analyst at BMI Research.

(Reporting by Henning Gloystein; Editing by Richard Pullin and Christian Schmollinger)