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May 12 (Reuters) -

By Liz Hampton

U.S. energy markets editor

Hello Power Up readers! Oil prices are up more than 3% this morning after the United States and China agreed to a temporary deal on tariffs. This comes as oil prices posted a 4% gain last week, their first weekly increase since mid-April, amid positive trade talks, including a deal between the United States and the United Kingdom. Global Brent futures are trading at $65.88 a barrel, up almost $2, while U.S. West Texas Intermediate futures are trading at $65.05 a barrel, also up about $2 a barrel. Henry Hub natural gas futures are off about 4%,at $3.648 per million British thermal units.

The United States and China said on Monday that they had reached a better-than-expected trade deal that will temporarily slash tariffs for the next 90 days, sending stocks, the U.S. dollar and oil markets higher.

As part of the deal, the United States will cut extra tariffs imposed on Chinese goods to 30% from 145%, while Chinese duties on U.S. goods will fall to 10% from 125%. To be sure, even with the pause, the tariffs are higher than levies imposed before U.S. President Donald Trump announced sweeping tariffs in early April.

Even so, the deal is raising hopes of an end to the trade war and that the de-escalation will limit potential economic fallout.

In other news, talks in Oman between U.S. and Iranian negotiators to resolve disputes over Tehran's nuclear program ended on Sunday. Iran publicly insisted on continuing its uranium enrichment, but further negotiations are planned. A nuclear deal could alleviate concerns about lower global oil supplies and pressure prices.

Also today, Reuters reporter Chen Aizhu has a great story on traders rebranding Venezuelan oil for China as Brazilian to circumvent U.S. sanctions and cut logistics costs.

Shippers have pulled this off by transferring oil from one ship to another at sea to disguise the origin of the crude, and more recently tampered with tankers' location signal to make it seem as through vessels are leaving from ports in Brazil.

China has registered some 67,000 barrels per day of bitumen imports from Brazil since July 2024; however, Brazilian customs data shows no exports of bitumen to China since at least 2023.

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The U.S. oil and gas rig count fell to its lowest since January, oilfield services firm Baker Hughes said on Friday. The number of rigs operating declined by six to 578, with oil rigs falling by five. Overall there are 25 fewer rigs in operation currently versus this time last year.

U.S. energy groups are seeking exemptions from a new rule that will require companies to move an increasing percentage of their liquefied natural gas exports on U.S.-built vessels. The rule, announced in April, is part of a push to revive domestic ship building. The United States is the largest LNG exporter but relies heavily on foreign built vessels. There are 792 LNG carriers in operation, of which 703 are made in South Korea or Japan.

Canadian pipeline company Enbridge beat Wall Street estimates for first-quarter profit on Friday, supported by higher earnings from its Mainline crude system. The company said its Mainline system was full to capacity during the entire first quarter, delivering a record 3.2 million barrels of oil.

Exxon Mobil has signed a long-term agreement to supply 250,000 metric tons of low-carbon ammonia annually to Japan's Marubeni. This marks Exxon's first signed customer agreement for its planned hydrogen facility in Baytown, Texas. Ammonia can be used as a carrier for hydrogen, allowing it to be shipped in liquid form.

The British government has given consent for a 400-megawatt solar photovolatic (PV) project in East Yorkshire, the Planning Inspectorate said last week. The solar farm will generateenough electricity to power around 100,000 homes.

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(Editing by Mark Porter)