Investing.com-- Oil prices rose Wednesday, buoyed chiefly by the U.S. signaling that early-stage trade talks with China will take place this week, while bets on tighter U.S. supplies also supported markets.

At 07:55 ET (11:55 GMT), Brent oil futures for June rose 0.7% to $62.59 a barrel, and West Texas Intermediate crude futures gained 0.9% to $59.62 a barrel.

Price extended gains into a second consecutive session after rebounding from a four-year low on Tuesday, with an element of bargain buying also in play.

U.S., China to begin formal trade talks

U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will meet their Chinese counterparts for trade talks in Switzerland this week, their respective offices said on Tuesday evening.

The meeting marks the first clear signal on U.S.-China trade talks, ending weeks of uncertainty and mixed signals, while also presenting a path towards an eventual thawing in relations.

Still, the announcement of the talks comes just after U.S. President Donald Trump said he was in no hurry to sign any trade deals, as his administration negotiates with a slew of countries.

A bitter U.S.-China trade war– which escalated in April– has been a major weight on oil prices, as traders fretted that crude demand will deteriorate amid increased global economic disruptions.

Recent, weak economic readings from the U.S. and China added to this notion. But China also offered some positive cues for oil, as travel demand rose sharply during the Labor day holiday last week.

"Talks would be a sign of potential de-escalation in trade tensions. Yet while negotiations would help improve sentiment in the oil market, we’ll need to see significant progress on lowering tariffs to improve the demand outlook," said analysts at ING, in a note.

U.S. production outlook tightens

Oil was also buoyed by expectations of tighter U.S. supplies in the long run, after several major shale  producers warned they were cutting production due to pressure from low prices.

Diamondback Energy (NASDAQ: FANG ) - a major producer in the Permian Basin - warned on Monday that U.S. oil production had likely peaked, and was set to fall in the coming months, as did peer Coterra Energy (NYSE: CTRA ). Both producers said they will cut some rigs in the coming months.

The comments spurred some bets on tighter U.S. oil supplies, which could help offset recently announced production increases by OPEC+.

Additionally, U.S. crude stocks fell by 4.5 million barrels in the week ended May 2, according to data from the American Petroleum Institute on Tuesday, indicating demand remains strong.

Official U.S. government data from the Energy Information Administration are due later in the session.

(Ambar Warrick contributed to this article.)