Oil prices rose around 3% on Thursday, buoyed by hopes of a breakthrough in looming trade talks between the United States and China, the world's two largest oil consumers.

Brent crude futures were up $1.70, or 2.8%, at $62.82 a barrel at 1:12 p.m. EDT (1712 GMT). U.S. West Texas Intermediate crude rose $1.79, or 3.1%, to $59.86.

U.S. Treasury Secretary Scott Bessent will meet with China's top economic official on May 10 in Switzerland for negotiations over a trade war that is disrupting the global economy. Optimism around those talks was providing support to the market, said SEB analyst Ole Hvalbye.

The countries are the world's two largest economies and the fallout from their trade dispute was likely to lower crude consumption growth.

Analysts cautioned that the recent tariff-driven volatility in the oil market was not over.

"The global risk premium that was pushing oil prices up and down during the past couple of years has been replaced by a tariff premium that will also be fluctuating in response to the latest headlines out of the Trump administration," Jim Ritterbusch, of U.S. energy consultancy Ritterbusch and Associates, said in a note.

In another trade development, U.S. President Donald Trump and British Prime Minister Keir Starmer on Thursday announced a "breakthrough deal" on trade that leaves in place a 10% tariff on goods imported from the UK while Britain agreed to lower its tariffs to 1.8% from 5.1% and provide greater access to U.S. goods.

On the supply front, the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, will increase its oil output, pressuring prices.
Analysts at Citi Research lowered their three-month price forecast for Brent to $55 per barrel from $60 earlier, but maintained their long-term forecast of $60 a barrel this year.

A U.S.-Iran nuclear deal could drive Brent prices down towards $50 per barrel on increased supply in the market, but if no deal were to happen, prices could go up to over $70, they added.

Source: Investing.com