Oil prices fell but remained near three-month highs on Monday after the United States and China agreed to an initial trade deal, a move market participants said could stoke oil demand and boost trade flows.

The United States and China cooled their trade war on Friday, announcing a “phase one” agreement that reduces some U.S. tariffs in exchange for what U.S. officials said would be a big jump in Chinese purchases of American farm products and other goods.

Brent crude oil futures fell 23 cents, or 0.4% to $64.99 a barrel by 0101 GMT, after closing at a near three-month high on Friday.

West Texas Intermediate crude was down 23 cents or 0.4% to $59.84 a barrel.

“It seems the market has now fully priced the phase 1 trade agreement so we are going to need further news if we are going to push through the important (technical) resistance that is just ahead of crude oil,” said Michael McCarthy, chief market strategist at CMC Markets.

The last-minute agreement that averted additional tariffs on Chinese goods totalling $160 billion lifted oil prices on Friday but investors remained cautious on Monday as they awaited details of the trade deal that is yet to be officially signed.

U.S. Trade Representative Robert Lighthizer said on Sunday the deal will nearly double U.S. exports to China over the next two years and is “totally done” despite the need for translation and revisions to its text.

China's State Council's customs tariff commission said on Sunday that it has suspended additional tariffs on some U.S. goods that were meant to be implemented on Dec. 15.

Still, concerns of China's slowing economy stoked worries of slowing oil demand in the key consumer after policy sources said China plans to set a lower economic growth target of around 6% in 2020 from this year's 6-6.5%.

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