2019.08.2906:24:00UTC+00Oil Extends Gains On Trade Optimism

Oil prices rose on Thursday to extend recent gains after China indicated it won't immediately retaliate against new U.S. tariffs.

"China has ample means for retaliation, but thinks the question that should be discussed now is about removing the new tariffs to prevent escalation of the trade war," Ministry of Commerce spokesman Gao Feng reportedly said in Beijing today.

Significantly, the comments came a day after the Trump administration officially stamped its extra 5 percent tariff on $300 billion in Chinese imports.

Official data confirming a big drop in U.S. crude inventories and optimism over the formation of a new government in Italy also offered some support, while the upside remained capped by growth worries.

Benchmark Brent crude edged up 0.1 percent to $59.98 a barrel while U.S. crude oil futures were up 0.75 percent at $56.19 a barrel.

San Francisco Federal Reserve President Mary Daly said on Thursday that uncertainty and a global growth slowdown are having an impact on the U.S. economy and she was in "watch and see" mode in assessing the need for another U.S. interest-rate cut.