Investing.com -- Oil prices rose Thursday after U.S. President Donald Trump announced a trade deal with the U.K. will soon be signed, pushing up hopes for a deescalation in his tariff agenda.

At 09:00 ET (13:00 GMT), Brent oil futures for July rose 1.1% to $61.82 a barrel, while West Texas Intermediate crude futures rose 1.5% to $58.92 a barrel.

Oil buoyed by U.S. trade deal hopes

The crude market was buoyed Thursday by the news that the U.S. and the U.K. were set to sign a trade agreement shortly.

"The agreement with the United Kingdom is a full and comprehensive one that will cement the relationship between the United States and the United Kingdom for many years to come," Trump said in a post on his Truth Social platform on Thursday. "Because of our long time history and allegiance together, it is a great honor to have the United Kingdom as our FIRST announcement. Many other deals, which are in serious stages of negotiation, to follow!"

This deal will be the first since Trump unveiled sweeping “reciprocal” tariffs against a slew of major U.S. trading partners, potentially reducing the uncertainty over his trade policy which has weighed heavily oil prices in recent weeks, as markets fretted over their potential impact, particularly given the conflict between U.S> and China, the world’s two largest economies.

Oil was also rattled by a slew of recent economic readings showing weakness in both the U.S. and China, after they became embroiled in a bitter trade war in April.

Oil nurses heavy losses

Despite Thursday’s gains, the oil markets have been nursing steep losses so far in 2025, with the losses having intensified in recent weeks amid heightened concerns over slowing demand and increased production.

Concerns over demand were fueled by increased economic uncertainty. The Federal Reserve added to this uncertainty on Wednesday, as it kept interest rates unchanged and flagged increased economic risks from trade disruptions and a potential uptick in inflation.

Expectations of higher supplies also weighed on oil, after the Organization of Petroleum Exporting Countries and allies said that it will increase production by a much bigger margin in June.

But this was somewhat offset by several major U.S. producers flagging a slowdown in domestic production, as a recent fall in oil prices spurred a cutback in capital spending.

U.S. inventories disappoint

Crude prices fell sharply on Wednesday, remaining close to four-year lows following disappointing U.S. inventory data.

Weekly inventory data from the Energy Information Administration was less bullish than American Petroleum Institute numbers the previous day, as EIA data showed that {{8849|U.S. crcrude oil inventories fell by 2.03 million barrels over the last week versus the 4.49 million barrels decline reported by the API.

"However, this still leaves crude oil inventories at their lowest level since March. Similarly, crude oil stocks at Cushing hit their lowest level since March, falling by 740k barrels," said analysts at ING, in a note.

(Ambar Warrick contributed to this article.)