The previous front month contract settled at $39.91 before expiring on Monday.

Brent crude futures for May delivery were 17 cents higher at $41.71 a barrel after rising 0.8% on Monday. Brent has risen more than 50% from 12-year lows in January.

"Oil and a number of other markets have reached a bit of a pause phase," said Ric Spooner, chief market analyst at CMC Markets in Sydney.

"For oil we have had a substantial rally. A lot of that has been preemptive in nature, preempting production cuts, and assisted by the weaker US dollar," he said.

"We have arrived at the situation where the market is waiting for news to catch up with it a little," Spooner said.

Stockpiles at the Cushing, Oklahoma delivery hub for US crude fell 570,574 barrels to 69.05 million in the week to 18 March, traders said on Monday, citing data from market intelligence firm Genscape.

Cushing inventories had previously risen toward 70 million barrels, causing market participants to fear they could hit capacity.

Iran may join other oil producers planning to freeze production to support prices at a later date, Opec's secretary general said on Monday, as the country is seeking to raise its exports after Western sanctions were lifted in January.

Producers from the Opec and non-members are due to meet on 17 April in Qatar discuss the output freeze.

Iran is keen to increase its oil exports, which fell by more than half during the sanctions over Tehran's disputed nuclear program, and has said it should not be bound by a production freeze until it can recover its market share.

"A further improvement in fundamentals will be needed for bulks, crude oil and base metals to rally further," ANZ said in a research note.