Oil holds near US$63 as crude stocks drop, trade tensions abate

Oil holds near US$63 as crude stocks drop, trade tensions abate

Data from the American Petroleum Institute yesterday was mixed, though it said crude inventories had fallen by 3.28m last week, which was better than expected.

The threat of a trade with with China has impacted the USA economic outlook, and generated demand worries in the oil patch.

Futures were little changed in NY.

At the time of writing, WTI traded at US$62.38 a barrel and Brent crude was at US$67.11.

Brent for June settlement added 28 cents to $68.30 a barrel on the London-based ICE Futures Europe exchange.

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The net long position in futures and options tops 600 million barrels of oil, the data shows, meaning that in the event of a sharper drop in price, sellers may find a dearth of buyers.

China today confirmed a 25 per cent levy on $50bn (£36bn) worth of US goods, including vehicles and agricultural products like soybeans, in response to US President Donald Trump's planned tariffs on on Chinese goods.

The statement said it was a countermeasure in response to a previous USA move to slap tariffs on steel and aluminum imports.

Brent crude futures fell $1.23 on the day to $66.89 a barrel by 0918 GMT, bringing losses for the week so far to almost 5 percent.

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.

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Oil rose toward $64 a barrel as investors received a reprieve from growing American crude stockpiles and on signs that trade tensions between the US and China may ease.

Prices last week rose to a recent high of $71 per barrel, before crashing by 4% early this week and staging a partial recovery on Wednesday.

"Oil prices are profiting from the general brightening of sentiment on the markets as signs emerge that the trade dispute is easing between the USA and China", analysts at Commerzbank said in a note.

Gasoline inventories fell in the reporting period by 1.1 million barrels, after a weekly draw of 3.5 million barrels in the prior week, and distillate stockpiles moved higher by 500,000 barrels.

The cuts run until the end of the year but leading Opec member Saudi Arabia has said they could be extended in one form or another into 2019.

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