Oil held near its lows after President Donald Trump’s threat of new tariffs on China rekindled fears about global demand, while signs of a thawing in U.S.-Iran tensions eased concerns about the threat to shipping lanes in the Middle East.

Futures in New York were steady, after dropping 3.3% on Tuesday. Trump reiterated his warnings about additional tariffs at a cabinet meeting Tuesday, after promising to hold off on more duties in a trade-war truce he reached with China’s Xi Jinping last month. Meanwhile, U.S. Secretary of State Mike Pompeosaid Iran, which has been hit by American sanctions over its weapons program, had signaled an openness to talks. The Islamic Republic’s foreign minister made similar comments, offering the first hint of a diplomatic solution since Trump announced plans in May 2019 to squeeze Iranian oil exports.

The industry-funded American Petroleum Institute reported U.S. distillate stockpiles rose by 6.23 million barrels last week. That would be the largest build since January if Energy Information Administration data confirms it on Wednesday. The API also reported domestic crude stockpiles fell by 1.4 million barrels.

August West Texas Intermediate oil was down 5 cents to $57.57 a barrel on the New York Mercantile Exchange as at 9:06 a.m. Sydney time. August WTI ended Tuesday’s session down $1.96 at $57.62.

Brent futures for September settlement declined $2.13 to $64.35 on Tuesday on the ICE Futures Europe Exchange in London.

Source : Bloomberg