UPDATE 5-Oil skids on trade war fear, bounces on U.S. inventory data


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NEW YORK (Reuters) – Oil dropped to a two-week low on Wednesday after China proposed a broad range of tariffs that fed fears of a burgeoning trade war with the United States, but crude bounced off session lows when U.S. data showed a weekly decline in crude stocks, instead of the increase analysts had expected.

FILE PHOTO – A pump jack stands idle in Dewitt County, Texas January 13, 2016. REUTERS/Anna Driver/File Photo

China, the world’s largest importer of raw materials, hit back at the Trump administration’s plan to levy tariffs on $50 billion of its goods, proposing duties on a broad range of U.S. imports including soybeans, planes, cars, whiskey and chemicals.

Brent crude futures fell 47 cents to $67.65 a barrel, a 0.7 percent loss, by 10:58 a.m. EDT (1458 GMT).

U.S. West Texas Intermediate (WTI) crude futures fell 47 cents to $63.04 a barrel, a 0.7 percent loss.

Both benchmarks slid to two-week lows after the China tariff proposal, with Brent hitting $66.69 and U.S. crude slumping as low as $62.06.

Prices pared losses after U.S. crude inventories fell by 4.6 million barrels in the last week, according to data from the Energy Information Administration. Analysts had expected an increase of 246,000 barrels.

“The report was mostly supportive with strong demand for crude oil from the 93 percent refinery utilization rate and the high level of crude oil exports of over 2 million barrels per day,” said John Kilduff, partner at energy hedge fund Again Capital LLC in New York.

Additional reporting by Amanda Cooper in London and Koustav Samanta in Singapore; Editing by David Gregorio


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