Oil prices cut their losses on Wednesday after government data showed U.S. crude stockpiles fell sharply last week as refineries hiked output.
Futures were still under pressure, however, after China said it would impose tariffs on a number of U.S. goods including agricultural products, raising the prospect of a growing trade war that could impact global growth.
Brent crude futures were down 36 cents at $67.76 U.S. per barrel by late morning in Wednesday morning in North America. The contract earlier fell as low as $66.69 U.S.
U.S. WTI crude futures fell 32 cents to $63.19 U.S. a barrel, rebounding from a session low of $62.06 U.S.
Data from the U.S. Energy Information Administration revealed Wednesday that crude inventories fell by 4.6 million barrels in the last week. That compared with analysts' expectations for an increase of 246,000 barrels.
EIA data also showed crude stocks at the closely-watched Cushing, Oklahoma delivery hub for WTI rose by 3.7 million barrels
Gasoline stocks fell by 1.1 million barrels, compared with analysts' expectations for a 1.3-million-barrel drop. Distillate stockpiles, which include diesel and heating oil, rose by 537,000 barrels, versus expectations for a 1.1-million-barrel decline, the EIA data showed.
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, retaliating with a list of duties on U.S. imports including soybeans, planes, cars, whiskey and chemicals.
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