Oil Finds Relief in Surprise US Stockpile Draw and Trade Hopes

Oil Finds Relief in Surprise US Stockpile Draw and Trade Hopes

Oil prices were modestly higher on Thursday, helped by gains in USA equities markets as trade tensions between China and the United States eased, but the advance was limited by strength in the dollar.S.

Futures gained as much as 0.7 percent in NY.

The fall had exceed $1 per barrel before losses were pared by United States data released mid-morning showing a reduction of 4.6 million barrels to 425.3 million barrels in the previous week's crude inventories.

"But increasing trade friction between China and the U.S. is likely to rock global markets and tarnish bullish sentiment in crude oil markets". US WTI crude futures CLc1 were at $64.51 a barrel, up 13 cents from their last close. While prices have been buoyed by America's potential withdrawal from a nuclear deal with Opec producer Iran, a gathering trade conflict between the U.S. and China-the world's two largest economies-has kept a lid on gains.

For the previous week, the EIA had reported a 1.6-million-barrel build in crude oil inventories.

Oil prices are likely to rise this year due to supply disruptions and an Opec-led deal to limit production, but doubts over the future of compliance with the multilateral agreement and rising USA production could stem the upward momentum.

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West Texas Intermediate for May delivery was at $62.38 a barrel on the New York Mercantile Exchange, down $1.13, at 11 London, after rising 50 cents on Tuesday. The contract fell 14 cents to $63.37 on Wednesday.

But by the end of the session, Brent crude LCOc1 futures lost just 10 cents to settle at $68.02 a barrel, a 0.15 percent loss. The global benchmark crude traded at a $4.62 premium to June WTI.

The oil price drop came even as the American Petroleum Institute, an industry group, said late Tuesday that USA crude inventories fell by 3.3 million barrels last week. The EIA data also showed that American oil production rose to an unprecedented 10.5 million barrels a day, topping the 10 million-barrel level for a ninth week.

China suspended tariff concessions on 128 items of USA products including pork and fruits starting Monday, according to the Ministry of Finance.

Despite worldwide objections, the USA administration chose to impose a 25-percent tariff on steel imports and a 10-percent tariff on aluminum, with tariffs on imports from countries including China.

On Thursday Trump said he was asking the United States Trade Representative to consider $100 billion more in tariffs as a retaliation against China.