Oil slips as investors eye Israel-Gaza truce talks, US Fed policy review

Oil edged down on Tuesday after Israel-Hamas ceasefire talks in Cairo helped quell market fears of an expanding conflict in the Middle East, while worries about the outlook for U.S. interest rates dragged on the market.

Brent crude futures dipped 19 cents, or 0.21%, to $88.21 a barrel , while U.S. West Texas Intermediate crude futures slipped 20 cents, or 0.24%, to $82.43 a barrel.

The front-month contract of both benchmarks lost more than 1% on Monday.

Hamas negotiators left Cairo late on Monday to consult with the group’s leadership after talks with Qatari and Egyptian mediators on a response to a phased truce proposal that Israel presented on the weekend.

While Hamas leaders visited Cairo, Israeli airstrikes killed dozens of Palestinians on Monday, with more than half the dead in the southern Gaza city of Rafah, which foreign leaders have urged Israel not to invade.

Continued attacks by Yemen’s Houthis on maritime traffic south of the key Suez Canal trading route have kept a floor under oil prices and could prompt higher risk premiums if players anticipate crude supply disruptions.