Oil prices rose 2% on Monday after a trade deal between the U.S. and the European Union, and U.S. President Donald Trump's announcement that he would shorten the deadline for Russia to end its war in Ukraine or face sanctions.

Brent crude futures were up $1.42, or 2.1%, at $69.86 a barrel by 12:58 p.m. EDT (1658 GMT), while U.S. West Texas Intermediate crude rose $1.40, or 2.2%, to $66.56.

Brent touched its highest price in 10 days after Trump said he was reducing the 50-day deadline he gave Russia over its war in Ukraine to 10-12 days.

The deal between the U.S. and EU and a possible extension of the U.S.-China tariff pause are also supporting global financial markets and oil prices, said Tony Sycamore, a market analyst at IG.

The framework trade pact with the EU announced on Sunday sets a 15% U.S. import tariff on most EU goods. Trump also said the deal called for $750 billion of EU purchases of U.S. energy in the coming years.

"Europe is going to have to give up a big percentage of everything they're getting from Russia," said Phil Flynn, senior analyst with Price Futures Group. "Not only does it (the trade pact) give U.S. producers a huge boost with this commitment, it also puts more pressure on (Russian President Vladimir) Putin to come to the table."

Senior U.S. and Chinese officials are meeting in Stockholm on Monday to try to extend their tariff truce before an August 12 deadline.

The U.S.-EU deal removed another layer of uncertainty and the focus seems to be shifting back towards fundamentals, said Tamas Varga, an analyst at PVM, adding that a strong dollar and falling Indian oil imports have weighed on crude prices.

On the supply side, an OPEC+ panel on Monday stressed the need for full compliance with oil production agreements, ahead of Sunday's separate gathering of eight OPEC+ members to decide on increasing oil output for September.

ING expects OPEC+, the group that includes the Organization of the Petroleum Exporting Countries and allies such as Russia, to at least complete the full return of 2.2 million barrels per day of additional voluntary supply cuts by the end of September.

Source: Investing.com