By Katya Golubkova and Emily Chow

TOKYO (Reuters) -Oil rose on Thursday after falling more than $1 in the previous session, supported by hopes of a breakthrough in looming trade talks between the U.S. and China, the world’s two largest oil consumers.

Brent crude futures were up 51 cents, or 0.8%, at $61.63 a barrel, while U.S. West Texas Intermediate crude rose 57 cents, or 1% to $58.64 a barrel at 0420 GMT.

“Optimism around the U.S. and China trade talks this weekend is a primary factor supporting the rebound in the oil market,” said independent market analyst Tina Teng.

“Signs of a de-escalating trade war improved market sentiment, triggering a rebound in oil prices in an oversold market.”

U.S. Treasury Secretary Scott Bessent will meet with China’s top economic official on May 10 in Switzerland for negotiations over a trade war that is disrupting the global economy. The countries are the world’s two largest economies and the disruptions from their trade dispute are likely to lower crude consumption growth.

U.S. President Donald Trump on Wednesday suggested China initiated the trade talks, adding he was not willing to cut U.S. tariffs on Chinese goods to get Beijing to negotiations. Bessent said the upcoming talks are a start, not ‘advanced’ discussions.

Weak demand concerns capped oil price gains after the Federal Reserve held interest rates steady but warned about rising economic uncertainties.

“The Fed signalled that rates will likely remain on hold until the effects of tariffs become clearer. This boosted the U.S. dollar, which added to headwinds facing the broader commodity markets,” said ING analysts in a report on Thursday.

A stronger U.S. currency makes dollar-denominated oil more expensive for holders of other currencies and dampening demand.

Adding to the concerns of weaker demand, U.S. gasoline inventories rose last week, stoking concerns among analysts that consumption is not building as the U.S. enters the summer demand period later this month.

At the same time, the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, will increase its oil output, adding to pressure on prices.

(Reporting by Katya Golubkova in Tokyo and Emily Chow in Singapore; Editing by Christian Schmollinger and Shri Navaratnam)