Oil prices rise on easing trade war concerns, sanctions on Iran

By Stephanie Kelly

NEW YORK (Reuters) - Oil futures rose on Monday after weeks of declines, supported by easing concerns over a potential trade war between the United States and China, as well as an expected fall in supply from Iran due to U.S. sanctions.

Brent crude futures rose 41 cents to $72.24 a barrel, by 11:17 a.m. EDT (1517 GMT).

U.S. West Texas Intermediate (WTI) crude futures rose 22 cents to $66.13 a barrel.

Last week, Brent declined for a third consecutive week, while WTI fell for a seventh week due to concerns about a slowdown in economic growth because of U.S.-Chinese trade tensions and weakness in many emerging economies.

However, China and the United States will hold trade talks this month, the two governments said last week, in an effort to resolve an escalating tariff war that threatens to engulf all trade between the world's two largest economies.

Still, White House economic adviser Larry Kudlow said Beijing should not underestimate President Donald Trump's resolve in what Kudlow called a "battle to eliminate tariffs and non-tariff barriers and quotas, to stop the theft of intellectual property and to stop the forced transfer of technology."

"Part of the weakness we've seen in crude oil has largely been due to trade as people are concerned that increasing tariffs and tensions on trade are going to increase the level of uncertainty and potentially reduce global GDP demand," said Brian Kessens, portfolio manager and managing director at Tortoise.

"Anything that reduces those tensions, you can see oil generally move back the other way."

Traders said U.S. sanctions against Iran were also supporting prices. The U.S. government has introduced financial sanctions against Iran which, from November, will also target the petroleum sector of OPEC's third largest producer.

On Monday, Iran asked the European Union to speed up efforts to save a 2015 nuclear deal between Tehran and major powers, which Trump abandoned in May. Most EU companies have pulled out of Iran for fear of U.S. sanctions and Tehran said France's Total had officially exited Iran's South Pars gas project.

"We continue to believe that despite all of the political goodwill that may exist in Europe, there is no practical way that many of the sizeable European buyers of Iranian crude can be protected from U.S. sanctions," JBC Energy said in a note.

However, China signaled it wanted to continue buying large volumes of Iranian oil despite U.S. pressure and was now switching to Iranian tankers to skirt U.S. sanctions on ship insurers.

(Reporting by Stephanie Kelly in New York; Additional reporting by Henning Gloystein in Singapore and and Dmitry Zhdannikov in Moscow; Editing by Louise Heavens, David Evans and Frances Kerry)