June 5 (Reuters) - Grades edged higher on Thursday, dealers said, as trader confidence grew after the U.S. and China agreed to more trade talks following a phone call between U.S. President Donald Trump and Chinese leader Xi Jinping.
"If we step back from the brink of a major trade war, it will increase demand expectations for oil both in the U.S. and in China," said Phil Flynn, senior analyst with Price Futures Group.
Meanwhile, Canadian Prime Minister Mark Carney and Trump are also in direct communication as part of Ottawa's bid to persuade Washington to lift tariffs, Industry Minister Melanie Joly said.
But weak export economics curbed gains as the spread between U.S. crude futures and Brent hit its narrowest point during the session since September 2023.
A narrower spread disincentivizes foreign buying of U.S. crude. U.S. crude futures' discount to Brent WTCLc1-LCOc1 narrowed to as little as minus $2.86 a barrel on Thursday.
* Light Louisiana Sweet WTC-LLS for July rose 10 cents to a midpoint of a $2.78 premium and was seen bid and offered between a $2.65 and $2.90 a barrel premium to U.S. crude futures CLc1
* Mars Sour WTC-MRS rose 10 cents to a midpoint of a $1.35 premium and was seen bid and offered between a $1.25 and $1.45 a barrel premium to U.S. crude futures CLc1
* WTI Midland WTC-WTM rose 5 cents to a midpoint of a 65-cent premium and was seen bid and offered between a 55-cent and 75-cent a barrel premium to U.S. crude futures CLc1
* West Texas Sour WTC-WTS rose 5 cents to a midpoint of a 5-cent premium and was seen bid and offered between a discount of 5 cents and a 15-cent a barrel premium to U.S. crude futures CLc1
* WTI at East Houston WTC-MEH, also known as MEH, traded between a 70-cent and 90-cent a barrel premium to U.S. crude futures CLc1
* ICE Brent August futures LCOc1 rose 48 cents to settle at $65.34 a barrel
* WTI July crude CLc1 futures rose 52 cents to settle at $63.37 a barrel
* The Brent/WTI spread WTCLc1-LCOc1 narrowed 8 cents to last trade at minus $2.89, after hitting a high of minus $2.86 and a low of minus $3.04