(Bloomberg) — Oil held a gain after US crude inventories fell the most since December, countering demand concerns surrounding a deepening trade war between the US and other nations.
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Brent traded near $74 a barrel, after rising 1.1% Wednesday to close at the highest since late February, while West Texas Intermediate was steady below $70. American stockpiles shrank by 3.34 million barrels last week, dropping to the lowest in a month, while inventories of gasoline also dipped, according to government data.
Oil has trended higher since early March as sanctions and tariffs from the Trump administration raise the potential for supply disruption from producers including Iran and Venezuela. President Donald Trump pushed ahead with tariffs on automakers and threatened harsher punishment on the European Union and Canada if they join forces against the US, further expanding a trade war.
“We believe the market could be significantly underpricing the impact of the upcoming April 2 US reciprocal tariffs on growth and commodity prices,” Citigroup Inc. analysts including Eric Lee and Francesco Martoccia wrote in a note.
Major oil traders including Trafigura Group and Gunvor Group are bearish on crude prices over the rest of the year due to rising supply, particularly from outside OPEC+. The producer group is also scheduled to start reviving idled output next month, the first in a series of planned hikes.
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