Oil prices rose to a seven-week high on Wednesday as US President Donald Trump said a deal was in place with China, raising expectations of a de-escalation in trade tensions between the world's two largest economies.

Brent crude futures rose $1.15, or 1.7%, to $68.02 a barrel by 1249 GMT, while US West Texas Intermediate crude futures rose $1.31, or 2%, to $66.29. At that level, WTI hit its highest in more than two months.

Trump said Beijing would supply magnets and rare earth minerals and the US would allow Chinese students into its colleges and universities. Trump added that the deal was still subject to final approval from him and President Xi Jinping.

Trade-related downside risks in oil have been temporarily removed, although market reaction was lukewarm as it is unclear how global economic growth and oil demand will be affected, said PVM analyst Tamas Varga. Meanwhile, Trump said he was less confident that Iran would agree to halt uranium enrichment in a nuclear deal with Washington, according to an interview released on Wednesday.

Trump said Beijing would supply magnets and rare earth minerals and the US would allow Chinese students into its colleges and universities. Trump added the deal was subject to final approval by him and President Xi Jinping. Trade-related downside risks in oil have been temporarily removed, although market reaction was lukewarm as it was unclear how global economic growth and oil demand would be affected, said PVM analyst Tamas Varga.

Meanwhile, Trump said he was less confident that Iran would agree to halt uranium enrichment in a nuclear deal with Washington, according to an interview released on Wednesday. Later on Wednesday, the market will focus on the weekly US oil inventories report from the Energy Information Administration. US crude stocks fell by 370,000 barrels last week, according to market sources citing figures from the American Petroleum Institute on Tuesday. (alg)

Source: Reuters