By Barani Krishnan
Investing.com - Oil jumped nearly 4%, extending its rally for a fourth-straight day despite a weak start on Tuesday, as the Trump Administration’s decision to delay additional tariffs on some Chinese imports led to widespread hope that the trade war between the two countries was on the mend.
Also boosting the market were bets that U.S. crude inventories could have fallen by nearly 2.8 million barrels last week after an unexpected build of almost 2.4 million barrels in the previous week to Aug 2.
New York-traded West Texas Intermediate crude settled up $2.17, or 4%, at $57.10 per barrel, after falling as much as 1.3% earlier in the session.
London-traded Brent crude, the benchmark for oil outside of the U.S., returned above the key $60 per barrel mark. Brent rose $2.70, or 4.6%, to $61.27 by 2:58 PM ET (18:58 GMT), after declining as much as 1% at the session lows.
With Tuesday’s rally, WTI has gained 11.4% in four-straight days, in its strongest gain within such a period since December 2016. Brent has risen 8.7% in the same period.
Still, oil prices remain down for August, with the U.S. crude benchmark showing a near-3% decline and its U.K. peer a 6% drop, after accounting for earlier losses related to the trade war.
The U.S. Trade Representative on Tuesday delayed imposing a 10% import tariff on laptops, cell phones, video game consoles and some other products made in China that had been scheduled to start next month, an abrupt pullback from a hardline stance on Chinese trade.
Tuesday’s decision came after China's Ministry of Commerce said Vice Premier Liu He conducted a phone call with U.S. trade officials.
President Donald Trump said on Aug. 1 he would impose a 10% tariff on $300 billion of Chinese goods by Sept. 1 after blaming China for not following through on promises to buy more American agricultural products.
Later in the session, attention will shift to weekly oil inventory data from the American Petroleum Institute (API).
The API will provide at 4:30 PM ET (20:30 GMT) a snapshot of what the Energy Information Administration is likely to report on Wednesday for crude, gasoline and distillate inventories for the week ended Aug. 9. Last week the EIA said crude inventories rose by 2.4 million barrels, putting an end to seven-consecutive weeks of draws.