SINGAPORE (Reuters) -Oil prices fell more than $1 a barrel on Monday, with Brent sliding under $90, as Middle East tensions eased after Israel withdrew more soldiers from southern Gaza and committed to fresh talks on a potential ceasefire in the six-month conflict.

Brent crude futures slipped $1.70, or 1.9%, to $89.47 a barrel by 0053 GMT.

U.S. West Texas Intermediate crude was at $85.29 a barrel, down $1.62, or 1.9%.

"It appears the catalyst is Israel saying it has withdrawn all troops except one brigade from the Southern Gaza strip, likely in response to growing international pressure and to deescalate tensions after it killed senior Iranian commanders in Syria last week," IG market analyst Tony Sycamore said.

Israel and Hamas sent teams to Egypt for fresh talks on a potential ceasefire ahead of the Eid holidays, easing tensions in the Middle East that drove up oil prices by more than 4% last week on concerns of supply disruption.

Israeli Defence Minister Yoav Gallant said on Sunday that Israel is ready to handle any scenario that may arise with Iran, after Tehran threatened to retaliate for the killing of Iranian generals on April 1.

The world's top oil exporter, Saudi Arabia, raised official selling prices for all crude grades to Asia in May, in line with expectations, after heavy oil supply tightened.

Fire struck an offshore platform operated by Mexico's national oil company Pemex on Saturday, killing at least one contractor. This comes after Pemex requested its trading unit to cancel up to 436,000 barrels per day of crude exports in April.

However, Goldman Sachs analysts expect Brent to stay below $100 a barrel in its base case scenario that assumes already solid demand, no further geopolitical hits to oil supply and that elevated spare capacity will lead OPEC+ to raise production in the third quarter.

In the United States, oil rigs rose by two to 508 last week while gas rigs fell by two to 110, the lowest since January 2022, Baker Hughes said in its report on Friday.

The U.S. employment report on Friday beat expectations, suggesting the economy ended the first quarter on solid ground and potentially delaying anticipated Federal Reserve interest rate cuts this year.

The Fed may push out rate cuts amid strong U.S. economic data and a tight labour market, Auckland-based independent analyst Tina Teng said.

Investors will be scouring consumer price index data from U.S. and China due later this week for further clues on the timing of possible Fed rate cuts and to gauge the economic health of the world's top two oil consumers.