Hedge funds and other money managers cut their bullish wagers on US crude futures to the lowest level since mid-June.
West Texas Intermediate (WTI) crude futures were at $67.90 per barrel, up 4 cents from their last settlement, buoyed by the decline in USA crude inventories.
However, this week, because of falling USA crude oil inventories, the price of USA crude has once again risen.
Signs of slowing USA crude output growth and a weaker US dollar also provided some support to oil prices, said Kim Kwang-rae, commodity analyst at Samsung Futures in Seoul.
According to BNP Paribas' London head of commodity markets strategy, Harry Tchilinguirian, considering the amount of oil lost from Iranian exports, it would need increases in production from other suppliers like Saudi Arabia to stabilize the oil market.
Still, the incendiary media headlines that have stoked these fears don't exactly correlate to the economic declines the trade war is expected to cause: Moody's Investor Service said, "These [overall] measures are expected to shave up to 0.3-0.5 percentage points from China's real GDP growth in 2019; for the US trade restrictions will trim off about one quarter of a percentage point from real GDP growth to 2.3 percent in 2019".
Traders said the supply versus demand outlook for oil markets was relatively tight because of the looming United States sanctions against Iran, which will target oil exports from November.
The prospect of a drop in oil exports from Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries, in response to new United States sanctions was also supporting the market. Total volume traded was about 35 per cent below the 100-day average.
Benchmark Brent crude oil was up 60 cents a barrel at $75.33 by 0935 GMT. The crude oil benchmark is now trading at $66.90 per barrel. For this month so far, Brent is trading at a premium of $6.73 on the West Texas Intermediate.
US commercial crude oil inventories C-STK-T-EIA fell 5.8 million barrels last week, the EIA said on Wednesday, more than three times forecasts. According to a survey whose results were compiled by Bloomberg, stockpiles at the Cushing, Oklahoma storage hub went up by 900,000 barrels in the previous week.
Negative pressure on the price of oil could emerge from decisions by the office of the U.S. Trade Representative, which has scheduled hearings this week on additional trade pressure on China.