Oil prices climb 2% to two-week high on US-China tariff reductions

Oil prices climbed about 2% to a two-week high on Monday after the U.S. and China agreed to temporarily slash tariffs, raising hopes of an end to the trade war between the world's two biggest economies.

Brent crude futures rose $1.35, or 2.1%, to $65.26 a barrel by 11:39 a.m. EDT (1539 GMT), while U.S. West Texas Intermediate (WTI) crude gained $1.40, or 2.3%, to $62.42.

The U.S. and China reached a better-than-expected deal to temporarily slash tariffs, sending Wall Street stocks, the U.S. dollar and crude prices sharply higher, as the world's two biggest oil consumers seek to end a damaging trade war that has stoked fears of recession.

"This was a larger-than-expected de-escalation and represents an upgrade to the outlook, though the negotiation process will likely remain challenging," analysts at bank ING said in a note.

Oil prices fell to a four-year low in April due primarily to worries about what the U.S.-China trade war would do to global economic growth and oil demand, while at the same time the Organization of the Petroleum Exporting Countries (OPEC) decided to boost oil output by more than previously expected.

In Saudi Arabia, the biggest producer in OPEC, oil giant Aramco, said it expects oil demand to remain resilient this year and sees further upside if the U.S. and China successfully resolve their trade dispute.