Oil surges almost 3 percent as China calms trade war jitters

WTI Crude Oil

Weekly May WTI Crude Oil

The gains followed a more than 2 percent rally on Monday during European and American trade hours, but that was a rebound from a 2 percent decline on Friday.

Oil prices rose on Thursday, holding onto a late-session rally the previous day, buoyed by the US government data showing a surprise drawdown in crude stockpiles.

Trump said Thursday he had ordered US trade officials to consider tariffs on an extra $100 billion of imports from China, raising tensions with Beijing, Kallanish Energy finds.

Despite a softening of trade concerns, oil markets still face an abundance of supplies that puts pressure on producers to keep their prices competitive in order not to lose market share.

U.S. WTI crude for May delivery now +2.5% at $64.99/bbl and June Brent crude +2.4% at $70.32/bbl.

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Brent crude futures were at $68.97 per barrel at 0417 GMT, up 32 cents, or 0.5 percent, from their last close.

Analysts said Xi's comments greatly relieved market anxiety for a potential trade war between the world's two largest economies.

USA crude inventories fell by 4.6 million barrels last week, compared with analysts' expectations for an increase of 246,000 barrels, EIA data showed on Wednesday.

Traders said weekly USA fuel supply data would give further market guidance.

Departures from the accord would result in renewed sanctions against Iran, which would hurt its oil industry.

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Thanks to strong demand and relatively subdued supply, recent inventory data has mostly crude oil prices.

Official data from the Energy Information Administration will be released today, amid forecasts for an oil-stock gain of around 0.2 million barrels. Only Russia pumps more crude, at nearly 11 million bpd.

Monthly oil reports are also due out from the Organization of the Petroleum Exporting Countries on Thursday and the International Energy Agency on Friday.

Still, growing U.S. crude stockpile, which has risen since mid-2016 to 10.46 million bpd, have become a hindrance to OPEC's plan to contain the supply glut and bolster prices.

The report comes a week after Crown Prince Mohammed first told Time magazine that he expected Aramco's public launch to coincide with higher oil prices.

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"Oil prices remain rangebound with WTI oil right in the middle of the $60-$65 per barrel range that has largely held since January of this year", said William O'Loughlin, investment analyst at Australia's Rivkin Securities.

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