Oil dips as traders watch for jump in U.S. crude stockpiles
Oil prices retreated on Wednesday as traders eyed a potential jump in U.S. crude inventories, though prices held near two-week highs amid optimism after the United States and China agreed to temporarily lower their reciprocal tariffs.
Brent crude futures fell 39 cents, or 0.6%, to $66.24 a barrel by 0400 GMT. U.S. West Texas Intermediate (WTI) crude slipped 36 cents, or 0.6%, to $63.31. Both benchmarks had climbed more than 2.5% in the previous session.
The two largest economies agreed on Monday to pause their trade war for at least 90 days, with the United States cutting tariffs to 30% from 145% and China slashing duties on U.S. imports to 10% from 125%.
"The U.S.-China economic pause might have crafted a narrative that could invigorate demand amidst a backdrop of cautious optimism," said Priyanka Sachdeva, senior market analyst at Phillip Nova.
However, expectations of a staggering jump in U.S. oil inventories capped optimism for now, Sachdeva added.
"This sharp contrast to last week’s substantial draw signals that the demand side is still grappling with significant challenges, leaving market watchers on edge and wondering where the next twist will come from," she said.
Crude stocks were up by 4.3 million barrels in the week ended May 9, market sources said, citing American Petroleum Institute figures on Tuesday.
Official weekly inventory data from the U.S. Energy Information Administration is due on Wednesday at 10:30 a.m. EDT (1430 GMT).
Source: Reuters
