*

Brent crude hits highest since July 18

*

US and China officials in Stockholm for trade talks

*

Trump's shorter deadline for Russia on Ukraine war raises

oil

flow concerns

*

Market looks to U.S. interest rate decision

By Ahmad Ghaddar

LONDON, July 29 (Reuters) - Oil prices edged up on

Tuesday on optimism that a trade war between the United States

and its major trading partners was abating and as President

Donald Trump ramped up pressure on Russia over its war in

Ukraine.

Brent crude futures were up 47 cents, or 0.7%, at

$70.51 a barrel at 0924 GMT, having touched their highest since

July 18, while U.S. West Texas Intermediate crude was at

$67.24, up 53 cents, or 0.8%.

Both contracts settled more than 2% higher in the previous

session.

The trade agreement between the United States and the

European Union, while imposing a 15% import tariff on most EU

goods, sidestepped a full-blown trade war between the two major

allies that would have rippled across nearly a third of global

trade and dimmed the outlook for fuel demand.

The agreement also calls for $750 billion of EU purchases of

U.S. energy over the next three years, which analysts say the

bloc has virtually no chance of meeting, while European

companies are to invest $600 billion in the U.S. over the course

of President Donald Trump's second term.

Top economic officials from the U.S. and China are meeting

in Stockholm for a second day to resolve longstanding economic

disputes and step back from an escalating trade war between the

world's two biggest economies.

Trump also set a new deadline on Monday of "10 or 12 days"

for Russia to make progress toward ending the war in Ukraine.

Trump has threatened sanctions on both Russia and buyers of its

exports unless progress is made.

"Oil prices rallied after President Trump said he would

shorten the deadline for Russia to come to a deal with Ukraine

to end the war, raising supply concerns," ING analysts said in a

note.

Market participants are also waiting to hear the outcome of

the U.S. Federal Open Market Committee meeting on July 29-30.

The Fed is widely expected to hold rates but could signal a

dovish tilt amid signs of cooling inflation, said Priyanka

Sachdeva, senior market analyst at brokerage Phillip Nova.

(Additional reporting by Anjana Anil in Bengaluru and Emily

Chow in Singapore

Editing by Kirsten Donovan)