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Ammon News - Oil prices were down 1% on Monday, erasing gains from Friday as Israel-Hamas peace talks in Cairo eased fears of a wider conflict in the Middle East and U.S. inflation data further dimmed the prospects of interest rate cuts anytime soon.

Brent crude futures fell by as much as 98 cents, or 1.09%, to $88.52 a barrel by 0644 GMT. West Texas Intermediate (WTI) futures were down 83 cents, or 0.99%, at $83.02 a barrel.

U.S. inflation rose 2.7% in the 12 months through March, data on Friday showed, above the Fed's target of 2%. Lower inflation would have increased the likelihood of interest rate cuts, which would stimulate economic growth and oil demand.

The dollar strengthened on the prospect of higher-for-longer interest rates. A stronger dollar makes oil more expensive for those holding other currencies.

Further weighing on the outlook for oil demand, China's industrial profit growth slowed down in March, official data showed on Saturday, in the latest sign of frail domestic demand in the world's second largest economy.

Cumulative profits of China's industrial firms rose 4.3% to 1.5 trillion yuan ($207.0 billion) in the first quarter from a year earlier, compared to a 10.2% rise in the first two months.

Brent had settled up 49 cents and WTI up 28 cents on Friday on concerns about disruptions to supply from events in the Middle East.

Reuters