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Oil prices steadied on Thursday (May 9) as an escalating trade battle between the United States and China counteracted upward pressure from a surprise decline in U.S. crude inventories.

CNBC reported that heightened tensions between the world’s two biggest economies have clouded the outlook for global growth, which influences oil demand expectations. Global equity markets were also hit.

Brent crude oil futures were down 3 cents at $70.34 a barrel by 7:12 a.m. ET (1112 GMT), heading for their second consecutive weekly loss. Earlier in the session they fell as low as $69.57 a barrel.

“Oil has been following equities’ moves, but the fundamentals remain strong for oil,” said Bjarne Schieldrop, chief commodity analyst at Swedish bank SEB. “Supply-side issues are bigger that those due to demand growth worries.”

U.S. President Donald Trump said on Wednesday that China “broke the deal” in trade talks with Washington and would face stiff tariffs if no agreement is reached.

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