Investing.com-- Oil prices dipped in Asian trading on Wednesday, pausing a four-day rally fueled by a U.S.-China tariff truce and soft inflation data, as investors weighed an unexpected rise in crude inventories from an industry report.

Markets’ focus was also on U.S. President Donald Trump’s trip to the Middle East, which saw Trump vowing to remove sanctions on Syria, while increasing pressure on Iranian oil exports.

As of 22:02 ET (02:02 GMT), Brent Oil Futures expiring in June fell 0.4% to $66.38 per barrel, while West Texas Intermediate (WTI) crude futures also lost 0.4% to $63.01 per barrel.

Both contracts rallied more than 2.5% on Tuesday, remaining near the two-week high reached earlier this week.

US-China tariff easing supports oil; Trump’s Gulf trip in focus

U.S. and China agreed on Monday to temporarily lower soaring tariffs placed on each other.

The U.S. will reduce its tariff on Beijing from 145% to 30%, while China will lower its retaliatory tariff from 125% to 10%, both for 90 days.

Supporting the upbeat sentiment, data on Tuesday showed that inflation remained contained, even as economists weighed the impact of rapidly evolving U.S. trade policies.

Meanwhile, President Donald Trump during his visit to Saudi Arabia said that the US  will lift long-standing sanctions on Syria, and announed a $600 billion commitment from Saudi Arabia to invest in the U.S.

The U.S. Treasury Department on Tuesday also imposed sanctions on companies it said have long sent Iranian oil to China. This came days after the fourth round of nuclear talks between Iran and the U.S. concluded.

The move raised some supply disruption fears, further underpinning the oil.

US crude inventories unexpectedly jumped last week - API

Despite easing trade tensions, oil prices dipped on Wednesday after sharp gains as investors mulled the American Petroleum Institute’s (API) weekly report.

{{8849|U.S. crcrude oil inventories unexpectedly surged last week, according to data, showing a build of 4.287 million barrels for the week ending May 9, defying analysts’ expectations of a 2.4 million-barrel drawdown.

This marked a sharp reversal from the previous week’s 4.49 million-barrel decline and suggests a potential weakening in demand. The unexpected increase in inventories is considered bearish for crude prices, as it implies that supply is outpacing consumption.

The Energy Information Administration (EIA) is scheduled to release its official inventory report later on Wednesday, which will provide further insights into U.S. crude stock levels and help confirm these trends.