LONDON, April 30 Reuters Oil steadied on Tuesday after the previous day39;s drop as IsraelHamas talks offered hopes of a ceasefire even as Red Sea attacks continued, while investors awaited signals on U.S. interest rates ahead of a key meeting on Wednesday.

Brent crude futures rose 27 cents, or 0.3, to 88.67 a barrel at 0830 GMT, while U.S. West Texas Intermediate crude futures gained 30 cents, or 0.4, to 82.93 a barrel.

The frontmonth contract of both benchmarks lost more than 1 on Monday.

The ongoing negotiation for a potential ceasefire between Israel and Hamas has led market participants to further unwind the geopolitical risk premium in oil prices, while the upcoming Fed meeting also drives some nearterm reservations, said Yeap Jun Rong, market strategist at IG.

Rates being kept at elevated levels for longer could trigger a further rise in the U.S. dollar, while also putting some risks to oil demand outlook.

Hamas negotiators left Cairo late on Monday to consult with the group39;s leadership after talks with Qatari and Egyptian mediators on a response to a phased truce proposal that Israel presented over the weekend.

The delegation was expected to report back within two days, two Egyptian security sources said.

The market will need a deal to be actually clinched in order to resume a selloff in crude, Vandana Hari, founder of oil market analysis provider Vanda Insights, said.

Continued attacks by Yemen39;s Houthis on maritime traffic south of the key Suez…