Oil prices hold near two-week highs on trade war reprieve, weaker dollar

By Colleen Howe

BEIJING (Reuters) - Oil prices held adjacent two-week highs successful aboriginal trading connected Wednesday, supported by an statement betwixt the U.S. and China to temporarily little their reciprocal tariffs and a falling U.S. dollar.

Brent crude futures inched down 10 cents, oregon 0.15%, by 0008 GMT to $66.53 a barrel. U.S. West Texas Intermediate (WTI) crude slipped 7 cents, oregon 0.11%, to $63.60. Both benchmarks climbed much than 2.5% successful the erstwhile session.

The dollar index, which measures the greenback against a handbasket of currencies, fell 0.67% connected Tuesday aft information showed U.S. ostentation was little than expected. A weaker dollar makes lipid little costly for holders of different currencies, expanding demand.

The 2 largest economies connected Monday agreed to intermission their commercialized warfare for astatine slightest 90 days, with the U.S. cutting tariffs to 30% from 145% and China slashing duties connected U.S. imports to 10% from 125%.

Prices had climbed much than $1.60 a tube connected Tuesday pursuing the agreement, settling up astir 3%.

Rystad vigor analysts said successful a enactment that the statement had "eroded immoderate request broadside pessimism," though cautioning that determination could beryllium lingering interaction from the tariffs contempt the rollbacks.

The marketplace was supported by reported declines successful U.S. gasoline and distillate inventories, a motion of resilient substance demand.

Gasoline inventories fell by 1.4 cardinal barrels and distillate stocks fell by 3.7 cardinal barrels, marketplace sources said connected information of anonymity, citing American Petroleum Institute figures connected Tuesday. However, crude stocks roseate by 4.3 cardinal barrels.

Analysts polled by Reuters expected gasoline stocks to autumn by 600,000 barrels, distillate inventories to emergence by astir 100,000 barrels and crude stocks to autumn by 1.1 cardinal barrels.

Official play inventory information from the U.S. Energy Information Administration is owed connected Wednesday astatine 10:30 a.m. EDT (1430 GMT).

The marketplace is watching U.S. President Donald Trump's travel to the Gulf. He kicked disconnected the sojourn Tuesday with an quality astatine an concern forum successful Riyadh, wherever helium announced that the U.S. would assistance longstanding sanctions connected Syria and secured a $600 cardinal pledge from Saudi to put successful the U.S.

Rystad Energy's planetary caput of commodity markets Mukesh Sahdev said that preventing lipid terms spikes implicit the summertime question play volition beryllium a cardinal portion of the president's docket connected the trip, adding that the U.S. could instrumentality vantage of little prices to bargain much Middle East crude for its Strategic Petroleum Reserve.

"The large chartless for the marketplace is however U.S. actions related to Iran, Russia and Venezuela volition effect successful proviso disruptions oregon additions," Sahdev said.