Oil set for weekly rise on trade deal hopes, new Iran sanctions

Oil prices rose to the highest in two weeks on Thursday, supported by hopes for a trade deal between the United States and the European Union and new U.S. sanctions to curb Iranian oil exports, which continued to elevate supply concerns.

Brent crude futures rose $1.86, or 2.82%, to $67.71 a barrel by 1:20 p.m. EDT (1720 GMT), and U.S. West Texas Intermediate crude was at $64.46 a barrel, up $1.99, or 3.19%.

Both benchmarks settled 2% higher on Wednesday at their highest levels since April 3 and are on track for their first weekly rise in three weeks. Thursday is the last settlement day of the week ahead of the Easter holidays and trade volumes are expected to be thin.

U.S. President Donald Trump said on Thursday there would be a trade deal with the European Union before his 90-day pause for reduced tariffs expires, according to media reports. "We're going to have very little problem making a deal with Europe or anybody else, because we have something that everybody wants," Trump told reporters.

Reaching a trade deal with the EU could potentially limit demand destruction from Trump's tariffs, said Bob Yawger, director of energy futures at Mizuho.

Sanctions issued by Trump's administration on Wednesday, including against a China-based "teapot" oil refinery, ramp up pressure on Tehran amid talks on the country's nuclear programme. "Teapot" is an industry term for small, independent and simple oil refiners.