Oil prices headed higher on Thursday after reports out of the United States showed a drawdown in USA crude stockpiles that analysts did not expect.
Futures gained as much as 0.7 percent in NY.
U.S. oil inventories shrank the most since January, according to government data on Wednesday, in contrast to a forecast expansion.
"The two countries are using discretion in their actions, and it does not look like the situation is developing into a full-scale trade war yet", said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting in Tokyo.
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"The likely overtightening of the crude oil market by OPEC and its allies and geopolitical risks linked to Iranian and Venezuelan crude oil supply shift oil's price risks to the upside, in our view", the report read. Though this was largely thanks to the inexorable slide in Venezuela's oil production, figures are figures and the market is prone to take them at face value.
West Texas Intermediate for May delivery gained 56 cents to settle at $64.94/bbl on the New York Mercantile Exchange, with prices posting a third-straight quarterly gain, the longest streak since 2011. The contract fell 14 cents to $63.37 on Wednesday. Total volume traded was 12 above the 100-day average. Prices slipped 10 cents, or 0.2 percent, to $68.02 Wednesday.
The oil price drop came even as the American Petroleum Institute, an industry group, said late Tuesday that US crude inventories fell by 3.3 million barrels last week. The EIA data also showed that American oil production rose to an unprecedented level of 10.5 million barrels a day last week, topping 10 million barrels a day for a ninth week.
The trade spat between the United States and China has also been escalating, with China replying with tariffs on some US$50 billions of USA imports after the White House announced more tariffs on Chinese products last week; the potential trade war has been rattling financial markets, especially in Asia.
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. The retaliatory measures came a day after the Trump administration threatened stiff new tariffs on some $50 billion Chinese imports across 1,300 categories of products.