Brent crude rises after surprise fall in US inventories

India's oil imports from Iran down 57% in April

Is Trump Imposing New Sanctions Against Iran?

"The fall in crude oil inventories also came despite lowered refinery operating rates", John Kilduff, founding partner at NY energy hedge fund Again Capital, said.

If the trade talks fail, investors fear that it could pave the way for a global economic slowdown, lowering oil demand around the world, while putting a downward pressure on oil prices.

Brent crude futures were at $69.78 per barrel by 0902 GMT, down 10 cents or 0.14 percent.

The U.S. Energy Information Administration expects global oil demand to rise by 1.4 million barrels per day (bpd) this year. Crude stockpiles had risen by a net of almost 30 million barrels in five earlier weeks, and oil bears had expected the trend to continue. The API report also showed a 2.8 million barrel decline in gasoline inventories.

China's crude oil imports in April unexpectedly surged to a record despite refinery maintenance outages and tepid domestic fuel demand, customs data showed, as state-run refiners built up stocks of Iranian crude oil anticipating a sanctions clampdown. The EIA said with USA waivers expiring, Iranian crude is likely to quickly fade from the world market and, while replacement barrels are coming, they may not arrive for months.

Still, prices were pressured by the trade war between the world's two largest economies.

The U.S. dollar was flat against its rivals Monday after pairing losses against the yen, as analysts downplayed the prospect that President Donald Trump will follow through with his threat of raising tariffs on China.

White House spokeswoman Sarah Sanders said on Wednesday the United States had received an indication from China that Beijing wants to make a trade deal. Led by Chinese Vice Premier Liu He, the trade talks are due to resume on Thursday in Washington.

"Moderate requests have been received from customers for June liftings, which will all be met, most notably from countries which previously had waivers from sanctions against purchases of Iranian crudes that were recently discontinued by the US administration", the Gulf source said.

"So people have been bearish because of that".

Adding to the upbeat sentiment was a drop in USA crude production as a whole from record highs of 12.3 million barrels per day in the previous week to 12.2 million bpd. "Exports of crude oil fell, but remain at robust levels".

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