Oil declined today, surrendering early gains, although the prospect of an easing in trade tensions between the US and China helped stem losses. 

Brent crude futures were down 35 cents at $78.16 a barrel this afternoon, having retreated from a session high of $79.19. US crude futures were down 2 cents at $71.26.

A possible US trade war with China is "on hold" after the world's two largest economies agreed to drop their tariff threats while they work on a wider trade agreement, US Treasury Secretary Steven Mnuchin said over the weekend.

His comments gave global markets a lift in earlier trade today.

The energy ministers of Saudi Arabia and the United Arab Emirates last week voiced concern about recent oil market volatility and plan to meet Russian counterpart Alexander Novak in St Petersburg to continue consultations. 

BP's chief executive Bob Dudley told Reuters he expected a flood of US shale and a possible reopening of OPEC taps to cool oil markets after crude rose above $80 a barrel last week. 

Dudley said he saw oil prices falling to between $50-$65 a barrel due to surging shale output and OPEC's capacity to boost production to cover a potential shortfall in Iranian supplies due to sanctions. 

Meanwhile, Venezuela's socialist leader Nicolas Maduro faced fresh international censure today after re-election in a vote foes denounced as a farce cementing autocracy. 

The US is actively considering oil sanctions on OPEC member Venezuela, which has seen output fall by a third in two years to its lowest in decades.