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Oil prices edged up in Asian trade on Wednesday after falling for three consecutive sessions as a US trade deal, with Japan signalled progress on tariffs, though gains were capped by fading hopes for a breakthrough at an EU-China summit.
Brent crude futures rose 21 cents, or 0.31 per cent, to $68.80 a barrel by 0351 GMT. US West Texas Intermediate crude futures gained 17 cents, or 0.26 per cent, at $65.48 per barrel.
Both benchmarks were down about 1.0 per cent in the previous session after the EU said it was considering countermeasures against US tariffs, as hope faded for a deal ahead of an August 1 deadline.
President Donald Trump said on Tuesday that the US and Japan had struck a trade deal that includes a 15 per cent tariff on US imports from Japan. He also said Japan had agreed on $550 billion in investments in the US
Meanwhile, industry expectations are low for Thursday's EU-China summit, which will test the bloc's unity and resolve amid mounting trade tensions with both Beijing and Washington.
"The slide (in prices) of the past three sessions appears to have abated but I don’t expect much of an upward impetus from news of the US-Japan trade deal as the hurdles and delays being reported in talks with the EU and China will remain a drag on sentiment," said Vandana Hari, founder of oil market analysis provider Vanda Insights.
China's commerce minister and the European Union's trade chief had a "candid and in-depth" discussion on economic and trade cooperation as well as other issues that both sides face ahead of the summit, the Chinese ministry said on Wednesday.
Separately, US crude and gasoline stocks fell last week, market sources said, citing American Petroleum Institute figures on Tuesday. Distillate stocks rose by 3.48 million barrels, they added.
"This will offer some relief to the middle distillate market, which has been looking increasingly tight," ING analysts wrote in a note, adding that low crude inventories will offer some support to prices even as a large surplus is expected to hit the market later in the year.
In another bullish sign for the crude market, the US energy secretary said on Tuesday that the US would consider sanctioning Russian oil to end the war in Ukraine.
The EU on Friday agreed its 18th sanctions package against Russia, lowering the price cap for Russian crude. But analysts said a lack of US participation would hinder the effectiveness of the package.