UPDATE 7-Oil mixed as trade fears weigh despite tight supply

Collin Eaton

* Trade war could hurt economic growth and dent oil demand

* OPEC has been leading production cuts since start of year

* U.S. sanctions on Iran and Venezuela help to tighten supplies (Updates prices, adds commentary, changes byline/dateline, previous LONDON)

HOUSTON, May 28 (Reuters) - Oil prices were mixed on Tuesday after a long-holiday weekend as investors feared the U.S.-China trade conflict will weigh on global demand despite tightened supplies.

Brent crude fell 41 cents, or 0.6%, to $69.70 a barrel by 10:04 a.m. CDT (1504 GMT), with prices repeatedly veering above and below the $70-mark in choppy trading.

U.S. West Texas Intermediate (WTI) futures were trading at $58.91, up 28 cents, or 0.5%, from their close on Friday.

WTI, trading for the first time since Friday after the long Memorial Day holiday weekend, was catching up with Brent which settled about 2% higher on Monday.

Investors remained concerned the escalating trade war between the United States and China could hit the global economy and dent fuel consumption.

Brent futures last week registered a decline of 4.5% and WTI slid by 6.4% for its biggest weekly loss since December.

"The U.S.-China trade war isnt getting any better and it's really starting to weigh on growth," said Bill Baruch, president of Blue Line Futures in Chicago. "Demand for crude could fall."

At the same time, global supplies have tightened because of supply cuts by the Organization of the Petroleum Exporting Countries and its allies since the start of the year, with political tensions in the Middle East adding to the upward pressure on prices.

U.S. sanctions have also largely taken Iranian and Venezuelan crude out of global markets.

"There's a geopolitical premium that's helping to support prices," said John Kilduff, an analyst at Again Capital LLC.

OPEC and its allies including Russia, known as OPEC+, are due to meet over June 25-26 to discuss output policy, but it remains unclear whether their production pact will be extended.

"Saudi Arabia and its Gulf allies will be under intense pressure to increase supplies," said Abhishek Kumar, head of analytics at Interfax Energy in London.

"Questions are also being raised over the unity of OPEC+ as Russia becomes increasingly concerned about losing its market share of oil exports to the U.S."

Last week's oil-price drop came as the Energy Information Administration reported U.S. crude oil inventories have risen to 476.8 million barrels, their highest since July 2017.

"North America is oversupplied," said Robert Yawger, director of energy futures at Mizuho in New York, adding that excess crude in storage will likely lead to a rise in U.S. crude exports as the spread between U.S. crude and the global benchmark widens.

"U.S. producers are in a hurry to get rid of it, as opposed to Brent, where you have to pay up when you do find it," Yawger said. (Additional reporting by Noah Browning and Henning Gloystein Editing by Marguerita Choy and David Goodman)