Oil prices fell in early Asian trade on Monday, giving up gains from Friday's session, as peace talks between Israel and Hamas in Cairo eased fears of a wider conflict in the Middle East.
US inflation data also reduced expectations of an imminent interest rate cut.
price movement
Brent crude futures fell $1, or 1.1 percent, to $88.50 a barrel before recovering to $88.55 by 0149 GMT. West Texas Intermediate (WTI) crude futures fell 84 cents, or 1 percent, to $83.01 a barrel.
Intensified efforts to broker a truce between Israel and Hamas eased geopolitical tensions and contributed to a weak opening in markets on Monday, said Tony Sycamore, an analyst at IG Markets.
A Hamas official told Reuters that a delegation from the movement will visit Cairo on Monday to participate in peace talks.
A White House spokesman said Israel had agreed to listen to US concerns about the humanitarian implications of a potential Israeli invasion of Rafah.
Markets are also awaiting the Federal Reserve's monetary policy review on May 1.
Data on Friday showed that inflation in the United States rose 2.7 percent in the 12 months through March, exceeding the central bank's target of 2 percent.
Lower inflation increases the likelihood of interest rate cuts, which in turn boosts economic growth and demand for oil.
In contrast, a stronger dollar increases expectations that interest rates will remain higher for longer. A stronger dollar makes oil more expensive for holders of other currencies.
