Oil prices rose for a second session on Friday buoyed by potential de-escalation of the U.S.-China trade war, but the market was headed for a weekly decline of around 2% amid concerns about oversupply.

Brent crude futures gained 31 cents to $66.85 a barrel by 0650 GMT, falling 1.7% so far for the week.

U.S. West Texas Intermediate (WTI) crude rose 35 cents to $63.12 a barrel, having declined 2.4% for the week.

"For today, oil prices are slightly up as the market responds to signs of easing tensions around Trump's tariffs and a potential shift in the Fed's policy stance, contributing to a broader market recovery," said LSEG senior analyst Anh Pham.

"On a weekly basis, however, prices are down as concerns over oversupply from OPEC+ persist, while the demand outlook remains uncertain amid ongoing trade tensions. A stronger U.S. dollar has also added pressure to crude prices," he added.

U.S. President Donald Trump said on Thursday that trade talks between the U.S. and China were underway, pushing back against Chinese claims that no discussions had taken place.

China is considering exempting some U.S. imports from its 125% tariffs and is asking businesses to provide lists of goods that could be eligible in the biggest sign yet of Beijing's concerns about the economic fallout from the trade war.

China hiked its tariffs after Trump announced higher levies on Chinese goods.

Oil prices tumbled earlier this month after the tariffs sparked concern about global demand and a sell-off in financial markets.Worries are growing about excess supply. Several OPEC+ members had suggested the group accelerate oil output increases for a second month in June, Reuters reported earlier this week.

The United States and Russia are moving in the right direction to end the war in Ukraine, but some specific elements of a deal remain to be agreed, Russian Foreign Minister Sergey Lavrov said in an interview with CBS News.

A halt to Russia's war in Ukraine and the easing of sanctions could allow more Russian oil to flow to global markets. Russia, a member of the OPEC+ group that includes the Organization of the Petroleum Exporting Countries, is one of the world's biggest oil producers along with the U.S. and Saudi Arabia.

Meanwhile, global oil demand has improved over the past week, mainly due to a rise in U.S. gasoline consumption, while distillate demand in the country remained robust as cold weather persisted into April, analysts at JPMorgan Commodities Research noted.

However, it still marked a 200,000 barrel-per-day gap below their current estimates for the month as demand in the first two weeks was subdued, they added.

Source: Reuters