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Oil surges more than 3 percent as trade war fears recede

In post-settlement trading, Brent hit $71.34, its highest since December 2014.

Reuters  |  New York 

Crude oil

prices surged more than 3 percent on Tuesday as investors grew more confident the and would resolve their trade dispute without damaging the global economy, while tensions and a weak dollar also supported prices.

futures jumped $2.39, or 3.5 percent, to settle at $71.04 a barrel. This was its largest single-day percentage gain since September.

In post-settlement trading, Brent hit $71.34, its highest since December 2014.

Intermediate futures gained 3.3 percent, or $2.09, to settle at $65.51 a barrel.

"This has been another huge day," said Bill Baruch, of in "There's soothing trade war fears, geopolitics, and a weaker dollar at play," Baruch said.

on Tuesday promised to open China's further and lower import tariffs, striking a conciliatory tone on the trade tensions between his country and the

Prices of both benchmarks have risen more than 5 percent in the past two trading days. Both have erased their losses from last week, when concerns over a possible trade war between the two largest economies contributed to declines of more than 4 percent.

tensions also supported prices, said Phillip Streible, at in

"markets are getting a bounce on increasing speculation about Trump and Syria," Streible said.

U.S. promised a swift response to a in Such a response is likely to increase the push for the to exit the nuclear deal, Streible said, given Iran's support of the

Departures from the accord would result in renewed sanctions against Iran, which would hurt its industry.

Also supportive to prices was the weakness of the U.S. dollar. The dollar fell against a basket of major currencies <.DXY>, hitting its lowest in nearly two weeks. Because is dollar-priced, a stronger greenback makes purchases in other currencies more expensive.

The American Institute will publish its storage data later on Tuesday. Analysts anticipated a decline in and gasoline inventories.

The said it expected domestic production to rise by 750,000 barrels per day (bpd) to 11.44 million bpd next year, more than previously expected.

Meanwhile, Saudi Arabia's Energy Ministry said it would keep exports below 7 million bpd and restore its inventories to normal levels.

First Published: Thu, April 12 2018. 03:02 IST