Oil gains on surprise drawdown in USA crude inventories

Oil gains on surprise drawdown in USA crude inventories

Yuan-denominated futures for September delivery rose 2.4 percent to 410.1 yuan a barrel on the Shanghai International Energy Exchange.

The global oil marker rose as much as 3.9% to $71.34 a barrel, blowing past its recent January peaks to reach a level last seen in December 2014.

U.S. West Texas Intermediate crude for May delivery was up 19 cents, or 0.3 percent, at $63.56 a barrel by 0140 GMT after settling down 14 cents.

Crude prices at the end of last week closed down roughly 2%, capping their worst week in two months, as the U.S. threatened new tariffs on Chinese imports and Beijing responded in kind.

U.S. President Donald Trump promised a swift response to a suspected chemical attack in Syria.

But future USA involvement in the Middle East could interrupt crude supply chains and make it hard for producers to ship overseas, sparking a bid for oil on Tuesday.

"There are headlines of a USA carrier group heading to the Middle East, the Saudis are looking for $80 Brent crude, and this is ahead of API inventories", said Roberto Friedlander, head of energy trading at Seaport Global Securities.

Shares of major energy stocks surged alongside crude. Total volume traded Tuesday was about 72 percent above the 100-day average.

Aluminum giant Rusal share price halved after U.S. sanctions
Rusal , a Russian-based aluminum maker, has been included in a list of companies sanctioned by the US. Washington has accused Deripaska of operating for the Russian government.

Concerns about a trade war between the USA and China also eased some more after President Donald Trump struck a more conciliatory tone, saying on Twitter on Tuesday that he will "make great progress together" with China's president, Xi Jinping.

It was unclear however, how Xi's promises will be able to resolve trade tensions between the two countries.

Both equity and oil markets rallied after the speech, while supposed safe havens such as U.S. Treasurys and gold slipped, supporting Wall Street's thesis that a trade war between the economic superpowers is increasingly unlikely.

The crude oil price rises had come "amid easing apprehensions of a trade war between the United States and China", said Sukrit Vijayakar, director of energy consultancy Trifecta.

Concerns surrounding the implications of heightened conflict in Syria, whose main ally is Russian Federation, drove oil prices higher, analysts said.

In a sign that oil supplies remain ample, China's Sinopec and several other Asian refiners plan to cut Saudi crude imports in May, instead buying from alternative sources, after Saudi Aramco set higher-than-expected official prices, a company official said yesterday.

"We believe oil prices will get higher in this year and also get higher in 2019, so we are trying to pick the right time", the prince told Time in reference to the IPO.