Brent fell 16 cents to $40.11. On Monday it settled down 17 cents at $40.27 a barrel.

US commercial crude stockpiles were expected to have reached record highs for a seventh straight week, while refined product inventories likely fell, a preliminary Reuters survey showed late on Monday.

The poll of eight analysts, taken ahead of weekly inventory reports from industry group the American Petroleum Institute (API) and the US Department of Energy's Energy Information Administration (EIA), estimated, on average, that crude stocks rose 3.2 million barrels in the week ended 25 March.

The API will release its data on Tuesday at 2030 GMT, while the EIA will publish its data on Wednesday at 1430 GMT.

Both oil benchmarks are up about 50% from 12-year lows hit in mid-February but the oil market has taken on a weaker tone in the past week, along with other commodities.

"The recent rally appears to be running out of steam as investors pull back on bullish positions," ANZ said in a morning note on Tuesday. "This will remain the case without continued improvement in fundamentals."

With oil prices rising strongly since January, most analysts are predicting the end of the year-and-a-half long slump, but also betting that there is little upside in the near future.

Barclays said net flows into commodities totalled more than $20 billion in January-February, the strongest start to a year since 2011, and prices could fall 20% to 25% if that were reversed.

"Were such a scenario to unfold, the price of oil could fall back to the low $30s," it said on Monday.