Oil prices drop as data shows surprise climb in U.S. inventories

TOKYO, Aug 14 (Reuters) - Oil prices fell on Wednesday after
industry data showed U.S. crude inventories unexpectedly rose
last week, erasing some gains from the last session that were
stoked after Washington said it would delay tariffs on some
Chinese goods.
The move by U.S. President Donald Trump sent commodities,
stocks and other assets higher because of optimism the effects
of the trade war, already being felt in economies across the
world, will be blunted. Oil prices surged by as much as nearly 5
percent. Brent crude LCOc1 was down 35 cents, or 0.6%, at $60.95 a
barrel at 0116 GMT, after rising 4.7% on Tuesday, the biggest
percentage gain since December.
U.S. oil CLc1 was down 46 cents, or 0.8%, at $56.64 a
barrel, having risen 4% the previous session, the most in just
over a month.
Markets had been pummelled in recent weeks amid tough talk
from Trump on trade and they remain on tenterhooks due to the
unpredictably of the U.S. president.
It is "becoming more difficult by the day to figure out what
President Trump will do other than to say he will favour his own
interests and then at times seem to work against them," said
Greg McKenna, strategist at McKenna Macro financial advisory
company in Australia.
China's commerce ministry said in a statement on Tuesday
that U.S. and Chinese trade officials spoke on the phone and
agreed to talk again within two weeks.
Data from industry group the American Petroleum Institute
(API) showed U.S. crude stocks unexpectedly rose last week.
API/S
Crude inventories increased by 3.7 million barrels to 443
million, compared with analyst expectations for a decrease of
2.8 million barrels, the API said.
Apart from signs that the U.S.-China trade tensions may be
easing, analysts said prices were propped up by a belief that
Saudi Arabia would stick with production cuts.
Saudi Arabia, the biggest producer among the Organization of
the Petroleum Exporting Countries (OPEC), said last week it aims
to keep its crude exports below 7 million barrels per day (bpd)
in August and September to help siphon off global oil stocks.
OPEC and its allies, known as OPEC+, agreed to cut 1.2
million bpd of production from the beginning of this year.