Oil prices firmed on Tuesday after Saudi Arabia indicated it was comfortable with a higher price range ahead of a meeting between major producing countries in Algeria.
Brent crude futures were up $1.03 a barrel to $79.09 a barrel at 0923 GMT, after hitting $79.32.
U.S. West Texas Intermediate (WTI) crude was up 90 cents at $69.80 per barrel, after rising over $1 to $69.95 a barrel.
"Oil prices have gone up after Saudi Arabia said it was comfortable with Brent oil above $80 a barrel," Olivier Jakob of Petromatrix consultancy said.
However, the market was tempered by an escalation in the China-U.S. trade war that has clouded the outlook for crude demand from the world's top oil consumers.
On Tuesday, China said it had no choice but to retaliate against new U.S. trade measures after U.S. President Donald Trump imposed 10 percent tariffs on about $200 billion worth of Chinese imports.
The tariffs are likely to limit economic activity in both China and the United States, potentially hitting growth in demand for oil as less fuel is consumed to move goods for trade.
The countries are the world's two largest economies.
"Oil markets are in a tug of war as Iran sanctions will continue to provide near-term support, while discussions around global demand in the wake of this morning's tariffs and speculation of further OPEC supply increases should temper upside ambitions," Oanda head of trading Stephen Innes said.
He added that Venezuela's production shortfall would also help prop up prices.
U.S. sanctions affecting Iran's petroleum sector will come into force from Nov. 4.
OPEC Secretary General Mohammad Barkindo said on Tuesday that OPEC and non-OPEC countries aim to agree a framework for long-term cooperation by December, when the oil producers plan to meet in Vienna.
Ahead of that meeting in Vienna, the producers will meet in Algeria this month to discuss possible scenarios.
Russia, the world's largest oil producer, and other producers in OPEC have kept in place a supply agreement to maintain prices while at the same time providing enough oil to the market.
"But there's still a big question mark over China's U.S. crude purchases, which fell at one point to zero, there's a risk of Chinese tariffs on U.S. crude oil," Jakob said, which could weigh as U.S. output continues growing.
Oil output from seven major U.S. shale formations is expected to rise by 79,000 bpd to 7.6 million bpd in October, the U.S. Energy Information Administration said on Monday.
Overall, U.S. output hit 10.7 million bpd in June.
On Monday, Russia's Energy Minister Alexander Novak said that OPEC and non-OPEC members would discuss all possible supply scenarios when they meet this month in Algeria.
(Reporting by Meng Meng and Aizhu Chen in BEIJING, additional reporting by Roslan Khasawneh in SINGAPORE Editing by Joseph Radford, Christian Schmollinger and Kirsten Donovan)