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Brent crude was down 80 cents, or 1.03%, at $76.86 per barrel as
of 0820 GMT. Front month U.S. West Texas Intermediate crude
futures were down 87 cents, or 1.17%, to $73.50.
The more actively traded second month WTI contract was last down
80 cents or 1.09% at $72.86 a barrel.
"On the one hand the thinner liquidity in the oil market at
present, on the other hand some of the comments from State
Secretary Blinken on a possible Gaza ceasefire deal, triggering
an unwinding of some oil price spike hedge positions," UBS
analyst Giovanni Staunovo told Reuters.
U.S. Secretary of State Antony Blinken said on Monday that
Israeli Prime Minister Benjamin Netanyahu had accepted a
"bridging proposal" presented by Washington to tackle
disagreements blocking a ceasefire deal in Gaza, and urged Hamas
to do the same.
"A ceasefire deal in Gaza now seems more likely than not, which
saw market participants pricing out the risks of geopolitical
tensions on oil supplies disruption," said Yeap Jun Rong, market
strategist at IG.
In China, worries about economic problems weighed on oil prices
after a dismal second quarter.
The world's second-largest economy lost further momentum in July
as new home prices fell at their fastest pace in nine years,
industrial output slowed, export and investment growth dipped
and unemployment rose.
On the supply side, production at Libya's Sharara oilfield has
risen to about 85,000 barrels per day in a move aimed at
supplying the Zawia oil refinery.
Libya's National Oil Corporation (NOC) had declared force
majeure on oil exports from the field on Aug. 7 after a blockade
by protesters hit production at the 300,000-bpd field.
In the U.S., crude stockpiles were expected to have fallen by
2.9 million barrels last week, a preliminary Reuters poll showed
on Monday.
(Reporting by Arunima Kumar in Bengaluru, Emily Chow in
Singapore and Arathy Somasekhar in Houston; editing by Sherry
Jacob-Phillips and Jason Neely)
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