*

Israel withdraws more soldiers from southern Gaza

*

Israel and Hamas send teams to negotiate potential

ceasefire

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PVM expects Brent to stay below $100/barrel

*

U.S. and Chinese consumer prices data in focus this week

(Changes dateline to London; updates prices at 1000 GMT)

By Natalie Grover

LONDON, April 8 (Reuters) - Oil drifted lower on Monday

after Israel withdrew more soldiers from Gaza and committed to

fresh talks on a potential ceasefire in the six-month conflict

in the Middle East.

Brent crude futures dropped 90 cents or 1%, to

$90.27 a barrel by 1000 GMT. U.S. West Texas Intermediate crude

was down 86 cents, or about 0.9%, at $86.05.

Oil prices had gained about 4% last week on escalating

geopolitical tensions.

Israel said on Sunday it had withdrawn more soldiers from

southern Gaza, leaving only one brigade. The country has been

reducing numbers in Gaza since the start of the year to relieve

reservists and is under growing pressure from allies to improve

the humanitarian situation.

Meanwhile, ceasefire talks were revived as Israel and Hamas

sent teams to Egypt for talks ahead of the Eid holidays, though

a Hamas official on Monday said no progress was made at a new

round of talks.

Among factors affecting oil's demand outlook, a U.S.

employment report on Friday suggested the economy ended the

first quarter on solid ground, which could prompt the Federal

Resrve to delay cuts to interest rates this year.

Investors will be scouring consumer price index data from

the U.S. and China this week for further clues on the timing of

possible Fed cuts and to gauge the economic health of the

world's top two oil consumers.

The market at present does not have enough about it

physically to warrant a charge beyond $90 a barrel to $100, said

John Evans at broker PVM.

"But given the tinderbox nature of the current geopolitical

crisis arenas of the Middle East and Ukraine/Russia and a keener

interest from big money, the downside potential is also limited

at present," he added.