"There is speculation that the Saudis are going to lower prices for their Asian customers", said Bob Yawger, director of energy futures at Mizuho in NY. The Energy Department's Energy Information Administration will release its weekly inventories data on Wednesday. Trump also tried to quell trade war fears on Wednesday, Tweeting that "We are not in a trade war with China". U.S. crude added 38 cents to $65.32. While prices have been buoyed by America's potential withdrawal from a nuclear deal with Iran that raises the prospect for sanctions against OPEC producer Iran, escalating trade conflict between the world's two largest economies has kept a lid on prices.
The crude oil prices went up after surprising data for drops in U.S. inventories.
The decline in prices was offset by a fall in USA production last week, which eased investor concern of a supply glut. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.4% at $65.18 a barrel. The contract rose 50c to $63.51 on Tuesday. Total volume traded on Thursday was about 23 percent below the 100-day average.
The price for Brent crude oil was down 0.12 percent as of 9:15 a.m. EST to $68.25 per barrel.More news: John Giannandrea Leaves Google To Join Apple
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Crude price outlook: Although concerns over geopolitical and trade spats will cap gains, a more optimistic sentiment this week should see Brent trade at US$68/b and WTI at US$64/b.
A day earlier, the American Petroleum Institute surprised traders with a crude oil inventory draw of 3.28 million barrels, versus analyst expectations of a modest build. 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.
Oil also got support from firm global equities, as the U.S. expressed willingness to negotiate a resolution on trade after proposed USA tariffs on $50bn in Chinese goods prompted a quick response from Beijing that it would retaliate by targeting key American imports.
Despite worldwide objections, the US administration made a decision to impose a 25-percent tariff on steel imports and a 10-percent tariff on aluminum, with tariffs on imports from countries including China. The Asian nation said on Wednesday it would levy an additional 25-percent tariff on about $50 billion of USA imports, following which the White House National Economic Council Director Larry Kudlow spent much of the day trying to calm markets.