Oil prices rose on Thursday, holding onto a late-session rally the previous day, buoyed by the USA government data showing a surprise drawdown in crude stockpiles.
Futures in NY slipped as much as 2.1 percent to the lowest intraday price since March 20. Prices erased most of their losses on Wednesday after data showed supplies stored in US tanks shrank the most since January, in contrast to a forecast for a 2 million-barrel gain.
The two countries still have time to work out their differences, he said, while China's ambassador to the US, Cui Tiankai, also said his first choice would be to consult the US over trade. USA crude added 38 cents to $65.32.
"It would appear that gloves are off in relation to the trade war between the two largest economies in the world".
The crude oil prices went up after surprising data for drops in U.S. inventories.
Oil climbed as top crude-exporting countries suggest they may extend output curbs beyond this year, adding momentum to a monthly rebound.
The West Texas Intermediate for May delivery dropped 1.93 USA dollars to settle at 63.01 dollars a barrel on the New York Mercantile Exchange, while Brent crude for June delivery lost 1.70 dollars to close at 67.64 dollars a barrel on the London ICE Futures Exchange. The contract fell 14 cents to $63.37 on Wednesday.
Brent crude futures were fetching $69.71 per barrel, up 37 cents, or 0.55 percent. Prices slipped 10 cents, or 0.2 percent, to $68.02 Wednesday. When crude prices are high, GDP growth suffers and there are rising trade deficits and rising fiscal deficits.
Inventories of USA crude fell by 4.617 million barrels for the week ended March 30, confounding expectations for a rise of 1.4 million barrels, according to data from the Energy Information Agency (EIA) on Wednesday. Distillate stockpiles, which include diesel and heating oil, rose by 537,000 barrels, versus expectations for a 1.1 million barrels drop.
"It's a combination of factors, the market rebalancing was certainly going to lead to a rebound in price but it's also a shift in geopolitics", said Harry Tchilinguirian, global head of commodity strategy at BNP Paribas, adding that there would be a geopolitical premium on prices until the US position on Iran was clear. China's Ministry of Commerce said it would levy 25 percent tariffs on imports of 106 USA products including automobiles and aircraft.
Late Thursday, the White House said the Trade Representative was directed to examine another $100 billion worth of tariffs.