Investing.com – Crude oil prices rebounded Friday, as fears the U.S.-China trade war may hurt oil demand from Beijing were eased somewhat after President Donald Trump reportedly said that proposed tariffs on China could be delayed or halted if Beijing “takes positive action.”
On the New York Mercantile Exchange crude futures rose 3.2% to $55.66 a barrel, while on London's Intercontinental Exchange, Brent jumped $1.39 to $61.89 a barrel.
During an interview with CNBC, U.S. President Donald Trump said that his administration could delay or halt the imposition of tariffs if China "takes positive action."
The comments come a day after Trump announced that the U.S. would impose new levies on $300 billion worth of Chinese goods, raising fresh fears about oil demand growth, sending oil prices tumbling 8% - their biggest one-day drop in more than four years.
If implemented, the latest round of U.S. tariffs on China would cut global oil demand by 250,000-500,000 barrels a day, said Bank of America Merrill Lynch.
"Global oil consumption growth is running at the weakest levels in nearly a decade," they say. "Protectionism has taken a big toll on global industrial activity,” it added.
Oil prices were also supported by signs of easing production in the U.S., as data on Friday showed domestic energy firms reduced the number of oil rigs operating for a fifth week in a row.
Drillers cut six oil rigs in the week to Aug. 2, bringing the total count down to 770, the lowest since February 2018, Baker Hughes, the big energy services company, reported Friday.
Oil prices have been caught in a tug of war, with tightening global supplies offset by timid oil demand.
Earlier this week, the Energy Information Administration reported a sixth-straight weekly draw in in domestic crude supplies, underscoring the trend of tightening global supplies, which has been led by OPEC.