Oil prices jump 2% on waning trade war

Oil markets volatility Middle East Syria WTI crude price

Oil markets volatility Middle East Syria WTI crude price

Oil hit US$70 a barrel today, in its biggest two-day rally in almost a month, as investors grew more confident that a brewing trade dispute between the United States and China may be resolved without causing harm to the global economy.

"Yesterday crude oil rallied sharply as it was tariff war off and Syria war back on which switched attention back to geopolitical problems in the Middle East".

Yet prices remain within recent ranges as oil markets still face an abundance of supply that puts pressure on producers to keep their prices competitive in order not to lose market share.

US West Texas Intermediate (WTI) crude futures were at $62.34 a barrel at 3.55am GMT, up 28c, or 0.45%, from their previous settlement.

US 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.

The remarks helped soothe investor jitters over the ongoing tit-for-tat tariff dispute between the US and China, which investors had feared might escalate into a full-blown trade war between the world's two largest economies.

WTI crude oil price technical chart breakout 2018

Past the trade dispute, changes in the Trump administration have triggered fears over the possibility of returning U.S. sanctions on main oil exporting countries, including Iran, Venezuela, and Russian Federation.

Platts reported that the recent widening of the spread between Brent and WTI crude benchmarks, combined with spring refinery maintenance in the US Gulf, has helped increased US crude exports to Europe in April, pressuring an already well-supplied sweet crude market, traders said.

"Oil prices have been susceptible to the brewing trade tensions between China and the USA ..." U.S. President Donald Trump promised a "major response" within 24 to 48 hours to an alleged chemical attack in Syria, which he said could be the work of the Syrian government, Iran, Russia or all three.

The American Petroleum Institute (API) is set to release oil inventory figures later this day, while the Energy Information Administration is due to present on Wednesday. Analysts polled by S&P Global Platts expect the agency to report a weekly rise of 100,000 barrels in crude stockpiles, along with declines of 2 million barrels in gasoline and 1.2 million barrels in distillate supplies.

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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