Oil prices fell slightly on Thursday after surging in the previous session on a bigger-than-expected draw in U.S. gasoline stocks, as the market weighed prevailing macroeconomic concerns against expectations of strong near-term demand.

Brent crude futures were down 3 cents at $70.92 a barrel by 0704 GMT, while U.S. West Texas Intermediate crude futures were down 8 cents at $67.60 a barrel.

Both benchmarks rose about 2% on Wednesday as U.S. government data showed tighter-than-expected oil and fuel inventories.

U.S. gasoline stocks fell by 5.7 million barrels, more than the 1.9 million-barrel draw expected by analysts, while distillate stocks also fell more than anticipated - despite a rise in crude stocks. "A draw in U.S. gasoline inventories raised expectations for a seasonal pickup in demand in the spring, but concerns about the global economic impact of the tariff war weighed on the market," said Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment.

"With strong and weak factors developing simultaneously, it is becoming difficult for the market to lean decisively in one direction or the other," he added.

Donald Trump threatened on Wednesday to escalate the global trade war with further tariffs on European Union goods, as major U.S. trading partners said they would retaliate against the U.S. president's trade barriers.

Trump's focus on tariffs has rattled investor, consumer and business confidence, and raised fears of a U.S. recession.

Meanwhile, the Organization of the Petroleum Exporting Countries said on Wednesday that Kazakhstan led a sizable jump in February crude output by the broader OPEC+ group, highlighting the challenge for the producer group in enforcing compliance with agreed output targets.

Concerns about declining jet fuel demand are weighing further on the market, with JP Morgan analysts saying that US Transportation Security Administration data showed "passenger volumes for March fell 5% year-on-year, following stagnant traffic in February".

However, recent strong global demand figures have limited overall market weakness.

"As of March 11, global oil demand averaged 102.2 million bpd, up 1.7 million bpd year-on-year and exceeding our projected increase for the month of 60,000 bpd," they added. (Newsmaker23)

Source: Reuters