Oil prices declined on Monday after Israel withdrew more troops from Gaza and committed to engage in new discussions regarding a potential ceasefire in the ongoing six-month-long conflict in the Middle East.

Oil prices declined on Monday after Israel withdrew more troops from Gaza and committed to engage in new discussions regarding a potential ceasefire in the ongoing six-month-long conflict in the Middle East.

Brent crude futures fell by more than 1%, dropping to $90 per barrel. U.S. West Texas Intermediate crude lost ground, falling below $86.

Oil prices had risen nearly 4% last week due to escalating geopolitical tensions.

Israel announced on Sunday that it had withdrawn more troops from southern Gaza, leaving only one brigade. The country has been reducing its presence in Gaza since the beginning of the year to rotate reservists and is facing increasing pressure from its allies to improve the humanitarian situation.

Meanwhile, Israel and Hamas resumed ceasefire talks and sent teams to Egypt for discussions ahead of the Eid holidays, although a Hamas official declared on Monday that no progress had been made in the new round of talks.

Among the factors affecting oil demand prospects, the U.S. employment report released on Friday suggests that the economy ended the first quarter on solid ground, which could lead the Federal Reserve to delay interest rate cuts this year.

Investors will scrutinize U.S. and China consumer price index data this week for further clues on the Fed’s potential rate cut timeline and to gauge the economic health of the world’s top two oil consumers.