Oil held gains at a 3 month high as investors focused on the prospects for a resolution to the U.S.-China trade war and signs of sliding shipments from the world's biggest crude exporter.

(Bloomberg) -- Oil held gains at a three-month high as investors focused on the prospects for a resolution to the U.S.-China trade war and signs of sliding shipments from the world’s biggest crude exporter.

Futures in New York rose 0.7 percent from their close on Friday, when they capped a 5.4 percent weekly advance. Trade talks between the world’s two top economies are “picking up” as a March 1 tariff deadline nears, according to Steve Censky, the U.S. Department of Agriculture’s deputy secretary. Saudi exports fell by over 1.3 million barrels a day in the first half of February from the same period last month, said tanker intelligence firm Kpler.

Oil has rallied around 23 percent this year as the Organization of Petroleum Exporting Countries and its allies embarked on a campaign to curtail output, while American sanctions on Venezuela and Iran are threatening to curb more supplies. Still, signs of slowing global growth and record U.S. crude oil rig flanges gulf coast production continue to weigh on investor sentiment, making the outcome of the trade negotiations pivotal for energy demand.

“The buy Wellhead market has seen a boost in prices from supply curtailments, but the conclusion of the trade talks will be key as it will show where demand is heading,” said Hong Sungki, a Seoul-based commodities trader at NH Investment & Securities Co. “Investors are still nervous that there hasn’t been a clear signal that the trade war will end.”

West Texas Intermediate for March delivery, which expires Wednesday, rose 39 cents from Friday to $55.98 a barrel on the New York Mercantile Exchange at 7:39 a.m. in London. Monday’s transactions will be booked Tuesday for settlement because of the U.S. President’s Day holiday. The more-active April contract gained 33 cents to $56.31.

Brent for April settlement fell 6 cents to $66.44 a barrel on the London-based ICE Futures Europe exchange after rising more than 8 percent during the five sessions through Monday. The global benchmark was at a $10.13 premium over WTI for the same month.

While high-level meetings in Beijing last week made little obvious progress, U.S. President Donald Trump has said he’s willing to delay additional tariff increases as long as there’s movement toward a “real deal.” Chinese trade negotiators headed back to Washington for more talks starting Tuesday.

Kpler estimated Saudi shipments fell to 6.2 million barrels a day in the first half of this month, lower than the level of 6.9 million barrels indicated by Energy Minister Khalid Al-Falih for March. It’s less likely the kingdom will be able to revive exports, given oil rig flanges gulf coast production at its largest offshore field Safaniyah is curtailed, Kpler said.

To contact the reporter on this story: Sharon Cho in Singapore at This email address is being protected from spambots. You need JavaScript enabled to view it. To contact the editors responsible for this story: Pratish Narayanan at This email address is being protected from spambots. You need JavaScript enabled to view it. Ovais Subhani, Andrew Janes