Oil prices have fallen close to their lowest level this year amid growing hopes about a ceasefire proposal in Gaza that could ease tensions in the Middle East.

Brent Crude dipped below $77 a barrel on Tuesday morning. This was its lowest level since the start of August and down from more than $82 just a week ago. 

Oil briefly dipped below $76 three weeks ago but has not consistently traded this low since January.

On Monday, US Secretary of State Anthony Blinken said Israel had accepted a “bridging proposal” towards a ceasefire deal in Gaza.

Meanwhile, continuing concerns about the health of the Chinese economy are also weighing on oil demand.

“Lingering Chinese demand concerns have been the key driver weighing on sentiment,” Warren Patterson, head of commodities strategy for ING Group in Singapore told Bloomberg. “Now the potential for an Israel-Hamas ceasefire has only provided further downward pressure.”

Petrol is still around 5p a litre more expensive at the pump than it was in January, according to the RAC

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