Oil prices dipped a few cents on Monday but held onto most of last week's gains as investors watched for U.S.-China trade talks in London later in the day supported by some hopes a deal could boost the global economic outlook and fuel demand.

Brent crude futures slipped 6 cents to $66.41 a barrel by 0450 GMT. U.S. West Texas Intermediate crude fell 4 cents to $64.54.

The prospect of a U.S.-China trade deal have boosted some investors' risk appetite and supported oil prices as three of Donald Trump's top aides were set to meet with counterparts in the first meeting of the U.S.-China economic and trade consultation mechanism.

The announcement of the meeting on Saturday followed a rare call on Thursday between Trump and President Xi Jinping, with both under pressure to dial down tensions as China's export controls on rare earths disrupt global supply chains.

Brent had advanced 4%, and WTI gained 6.2%, last week, their first weekly gain in three weeks after news the two countries were talking about their trade differences.

"Brent crude oil gained ground to near the top of its recent trading range over the past week on buying encouraged by an increased appetite for risk in equity markets as tariff fears eased," Tim Evans of Evans Energy said in a note.

A U.S. jobs report showing unemployment held steady in May appeared to increase the odds of a Federal Reserve interest rate cut, further supporting gains last week.

In China, exports growth slowed to a three-month low in May as U.S. tariffs slammed shipments, data showed on Monday, while factory-gate deflation deepened to its worst level in two years, heaping pressure on the world's second-largest economy on both the domestic and external fronts.

The data also showed that China's crude oil imports declined in May to the lowest daily rate in four months, as state-owned and independent refiners underwent widespread planned maintenance.

The prospect of a China-U.S. trade deal that could support economic growth and increase demand for oil outweighed worries about increased OPEC+ supply after the group announced on May 31 another big output hike for July.

HSBC expects OPEC+ to accelerate supply hikes in August and September, which are likely to raise downside risks to the bank's $65 per barrel Brent forecast from the fourth quarter of 2025, it said in a research note on Friday.

Capital Economics researchers said they believe this "new faster pace of (OPEC+) production rises is here to stay".

WTI's discount to Brent has also been narrowing on a combination of increased OPEC+ output, modest U.S. crude oil supply growth and the potential for output declines next year, ING analysts led by Warren Patterson said in a note.

The U.S. benchmark strengthened on supply concerns after wildfires disrupted production in Canada and on robust U.S. fuel demand during the summer driving season.

The number of operating U.S. oil rigs, an early indicator of future output, fell by nine to 442 last week, energy services firm Baker Hughes (NASDAQ:BKR) said on Friday.

Source: Investing.com