Oil prices rebound slightly after heavy declines over trade dispute

TOKYO (Reuters) – Oil prices rebounded on Thursday after heavy losses in the previous session that came as the China-U.S. trade dispute escalated, with official Chinese data indicating energy demand in the world’s top importer has yet to recover its strength.

futures were up 24 cents, or a third of a percent, at $72.52 a barrel by 0355 GMT, following a decline of more than 3 percent on Wednesday.

U.S. West Texas Intermediate (WTI) crude futures had gained 7 cents to $67.02 a barrel, after dropping 3.22 percent the previous session.

China is slapping tariffs of 25 percent on a further $16 billion in imports from the United States, from fuel and steel products to autos and medical equipment.

The ongoing trade war is rattling global markets and investors fear any slowdown in the world’s two largest economies would slash demand for commodities.

China’s crude imports recovered slightly in July after two months of decline, but were still among the lowest this year due to a drop-off in demand from smaller independent refineries.

China, the world’s top importer of crude, took 8.48 million barrels per day (bpd) last month, up from 8.18 million bpd a year earlier and June’s 8.36 million bpd, customs data showed.

Prices are drawing some support from U.S. sanctions introduced on Tuesday against Iran, third-biggest producer in the Organization of the Petroleum Exporting Countries.

The renewed sanctions won’t directly target oil until November, but U.S. President Donald Trump has said he wants as many countries as possible to cut their imports of Iranian crude to zero.

The U.S. Energy Information Administration, meanwhile, reported that crude inventories fell 1.4 million barrels in the latest week, less than half the 3.3 million-barrel draw analysts had expected.

Gasoline stocks notched a surprise rise as well of 2.9 million barrels, not the 1.7 million-barrel drop analysts had predicted in a Reuters poll.

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