By Laila Kearney and Georgina McCartney

LONDON (Reuters) -Oil prices slipped on Friday and were on track for a third consecutive weekly decline, pressured by muted demand in China and hopes of a Gaza ceasefire deal that could ease Middle East tensions and accompanying supply concerns.

futures for September dipped 56 cents to $81.81 a barrel by 1250 GMT. U.S. West Texas Intermediate crude for September fell 40 cents to $77.88.

For the week, Brent is trading down almost 1% while WTI is down more than 2%.

Recent data, such as July 20 figures showing that China’s total fuel oil imports dropped 11% in the first half of 2024, have raised concern about the wider demand outlook in China.

In the Middle East, hopes of a ceasefire in Gaza have been gaining momentum.

A ceasefire has been the subject of negotiations for months, but U.S. officials believe the parties are closer than ever to an agreement for a six-week ceasefire in exchange for the release by Hamas of female, sick, elderly and wounded hostages.

Oil price declines were capped, however, by threats to production from Canadian wildfires, a large stocks draw and continued hopes of a September cut to U.S. interest rates after strong economic data, said PVM oil analyst Tamas Varga.