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UPDATE 5-Oil rises but U.S.-China trade tensions remain a concern

* Trade dispute between U.S. and China unsettles markets

* Conflict in Syria also keeps markets on edge

* U.S. drillers add 11 rigs drilling for new oil

* Graphic on U.S. vs China tariffs: https://tmsnrt.rs/2GXE9qr (Updates prices)

LONDON, April 9 (Reuters) - Oil rose on Monday, recovering some of Friday's decline on the potential impact on global growth from a trade dispute between China and the United States as well as rising U.S. output.

Markets were also eyeing the situation in Syria after reports - denied by the Pentagon - that U.S. forces had struck a major air base there.

Brent crude futures were up 83 cents at $67.94 a barrel by 1204 GMT, above a session low of $67. The price approached its lowest in three weeks last week.

U.S. WTI crude futures were up 57 cents at $62.63.

Oil prices fell about 2 percent on Friday after U.S. President Donald Trump threatened new tariffs on China, reigniting fears of a trade war between the world's two largest economies.

"The market is currently concerned for the escalating China-U.S. trade war tensions. And with good reason since this will be bad for global growth and oil demand growth further down the road," said Bjarne Schieldrop, head of commodity strategy at SEB.

"However, oil market fundamentals are tightening and oil prices look set to be squeezed higher as long as OPEC+ sticks to its cuts."

Oil prices are still showing a gain this year, thanks to healthy demand and supply restraint led by the Organization of the Petroleum Exporting Countries, which started in 2017 to rein in oversupply and prop up prices.

With Chinese markets closed last Thursday and Friday, Shanghai crude futures played catch-up on Monday, dropping 0.2 percent to about 401.4 yuan ($63.73) a barrel.

"Oil prices have been susceptible to the brewing trade tensions between China and the U.S. ... However, fundamental support levels have been demonstrated with OPEC's suggestion on a production limit extension into 2019," said Singapore-based Phillip Futures.

In physical oil markets, OPEC's No.2 producer Iraq said on Monday that it will keep prices steady for its May crude supplies.

West Africa's crude oil loadings for Asia are set to fall to a five-month low in April, dragged down by a backlog of cargoes outside China and strong Brent prices that hindered new bookings, a Reuters survey of shipping fixtures and traders showed on Friday.

In the United States, drillers added 11 rigs in the week to April 6, bringing the total count to 808, the highest level since March 2015, General Electric's Baker Hughes energy services firm said on Friday. ($1 = 6.2984 Chinese yuan renminbi)

(Additional reporting by Henning Gloystein in SINAGPORE Editing by David Evans and David Goodman)