* Trump bans travel to U.S. from Europe
* Oil dives into steepest contango since Feb 2015
* Graphic on revised demand forecasts: https://tmsnrt.rs/2TTFao7 (Updates prices, adds comment)
LONDON, March 12 (Reuters) - Oil prices fell on Thursday following surprise travel restrictions imposed by U.S. President Donald Trump in an attempt to halt the spread of coronavirus after the World Health Organization described the outbreak as a pandemic.
The slump in oil is being compounded by the threat of a flood of cheap supply after Saudi Arabia and United Arab Emirates said they would raise output in a standoff with Russia.
Brent crude was down $2.46, or 6.9%, at $33.33 by around 1108 GMT. U.S. crude was down $2.05, or 6.2%, at $30.93.
Global shares also took a hit after U.S. President Donald Trump said the United States would suspend all travel from Europe as he unveiled measures to contain the coronavirus. 1/2/RUBUTSTN=MCX;CFtNAME 3/4
The oil market was taking the decision very negatively due to the impact on jet fuel demand and expectations for business activity and economic growth, said Bjoernar Tonhaugen, head of oil markets at energy consultant Rystad.
"It leads to further loss of confidence in governments handling of the fall-out and increases uncertainty about the extent of the virus impact on the overall economy, reflected in sharp falls in risk assets across the board this morning."
The two benchmarks are down about 50% from highs reached in January. They had their biggest one-day declines since the 1991 Gulf War on Monday after Saudi Arabia launched a price war.
The six-month Brent contango spread <LCOc1-LCOc7> from May to November widened to as low as $6.40 a barrel, a level not seen since February 2015.
Contango is where the futures price of a commodity is higher than the spot price, prompting traders to fill tankers with oil to store for later delivery.
As many await to see who will break first in the Saudi-Russian price war, Ehsan Khoman, head of MENA research and strategy at MUFG, said: "We believe that both sides have enough financial capacity and sufficiently divergent goals to sustain the oil price war for many quarters, not months."
The U.S. Energy Information Administration (EIA) and the Organization of the Petroleum Exporting Countries (OPEC) have slashed forecasts for oil demand because of the coronavirus outbreak and now expect demand to contract this quarter.
"If the crisis persists for another two or three months, many companies will go bankrupt, especially those in the U.S. energy sector which also have to deal with an oil price war," said Hussein Sayed, chief market strategist at FXTM.
Weekly data on U.S. inventories showed minimal effects from the coronavirus pandemic so far. Crude stocks increased by 7.7 million barrels, but inventories of gasoline and diesel fell sharply, as refining runs remain at seasonally low levels.
(Reporting by Bozorgmehr Sharafedin in London, additional reporting by Aaron Sheldrick in Tokyo; editing by Jason Neely)