Oil prices fell on Wednesday as traders focused on a potential increase in U.S. crude inventories, though prices remained near two-week highs following the easing of trade tensions between the United States and China.
The world’s two largest economies agreed on Monday to pause their ongoing trade conflict for at least 90 days. As part of the temporary truce, the U.S. reduced tariffs on Chinese goods from 145% to 30%, while China cut its tariffs on U.S. imports from 125% to 10%.
Brent crude futures dropped 34 cents, or 0.51%, to $66.29 a barrel by 8:29 WAT. U.S. West Texas Intermediate (WTI) crude declined 32 cents, or 0.5%, to $63.35. Both benchmarks had gained over 2.5% in the previous session, buoyed by hopes for a resolution to the trade dispute.
Market attention also turned to rising U.S. crude inventories, which were up by 4.3 million barrels in the week ending May 9, according to sources citing data from the American Petroleum Institute (API).
Additionally, investors are keeping a close eye on U.S. President Donald Trump’s trip to the Gulf, which began on Tuesday. In a speech at an investment forum in Riyadh, Trump announced the U.S. would lift longstanding sanctions on Syria and confirmed a $600-billion investment pledge from Saudi Arabia.
The U.S. also imposed new sanctions on about 20 companies, accusing them of aiding Iran’s military in sending oil to China. The sanctions are part of broader efforts to address concerns over Iran’s nuclear program, following a fourth round of U.S.-Iran talks in Oman.
