NEW YORK: Oil prices fell about 2% to a six-week low on Tuesday on rising expectations of a ceasefire in Gaza and growing demand concerns in China.

Brent futures fell $1.38, or 1.7%, to $81.02 a barrel by 12:13 p.m. EST (1613 GMT), while US West Texas Intermediate (WTI) crude fell $1.49, or 1.9%, to $76.91.

That put both crude benchmarks on track for their lowest closes since June 7 and pushed both into technically oversold territory for the first time since early June.

It was also the first time WTI futures were down for four days in a row since early June. Brent was down for a third day in a row. In the Middle East, efforts to reach a ceasefire deal between Israel and militant group Hamas under a plan outlined by US President Joe Biden in May and mediated by Egypt and Qatar, have gained momentum over the past month. Israeli Prime Minister Benjamin Netanyahu told families of hostages held in Gaza a deal to secure their release could be near even as fighting raged in the Palestinian enclave.

Growing bets on interest rate cuts in September, however, could provide a floor to oil prices, as lower borrowing costs tend to support oil demand.

European Central Bank Vice-President Luis de Guindos hinted at a possible interest rate cut in September, while in the US, investors are betting the Federal Reserve will cut interest rates in September.

The Fed hiked rates aggressively in 2022 and 2023 to tame a surge in inflation.

Higher interest rates increase borrowing costs for consumers and businesses, which can reduce economic growth and demand for oil.

China surprised markets by cutting major short and long-term interest rates on Monday, its first such broad move since last August, signalling intent to boost growth in the world’s second-largest economy.