Oil prices decline amid potential Gaza ceasefire, dollar strength

Oil prices have slipped on the possibility of a nearing Gaza ceasefire that could ease geopolitical concerns in the Middle East, while a stronger dollar and faltering US gasoline demand also weighed on prices.

US Secretary of State Antony Blinken said on Thursday he believed talks in Qatar could reach a Gaza ceasefire agreement between Israel and Hamas, easing geopolitical risks in the region.

Blinken met Arab foreign ministers and Egypt's President Abdel Fattah el Sisi in Cairo as negotiators in Qatar centred on a truce of about six weeks.

Brent crude futures fell by 0.5 percent to $85.36 a barrel, while US crude futures dropped 0.5 percent to $80.67/barrel.

Both contracts are set to end the week little changed after rising more than 3 percent last week.

Oil was trading lower on reports of a UN draft resolution calling for a ceasefire in Gaza and as another round of profit-taking kicked in, IG analyst Tony Sycamore said in a note.

Dollar-Oil relationship

In the United States, the world's top oil consumer, gasoline product supplied, a proxy for demand, slipped below 9 million barrels for the first time in three weeks, indicating a possible slowdown in crude demand.

But consultancy FGE said preliminary weekly data for the first half of March that showed on-land crude and main product stocks at major oil hubs globally falling by almost 12 million barrels, compared with the 2015 to 2019 average draw of 6 million barrels, could be bullish for oil.

Meanwhile, the US dollar, which trades inversely with oil prices, strengthened after the Swiss National Bank's surprise interest rate cut bolstered global risk sentiment.

A stronger dollar makes oil more expensive for investors holding other currencies, dampening demand.