But with US crude stockpiles continuing to build and Iran showing little interest in joining major producers in freezing production, oil prices may have gained too much too soon in recent weeks.

"With the focus still on an output agreement, oil markets are likely to remain susceptible to further sell-offs as producers baulk at cutting production," ANZ said in a note on Tuesday.

US crude futures were 14 cents lower at $37.04 a barrel early on Tuesday. On Monday, they settled down 3.4% at $37.18 a barrel.

Brent was down 20 cents at $39.33, after finishing the last session at $39.53.

Crude inventories across the US likely hit record highs for a fifth straight week last week, rising 3.3 million barrels, a Reuters poll of analysts said.

Saudi Arabia kept its crude production steady in February at just above 10 million barrels per day, suggesting the world's biggest oil exporter is keeping to its preliminary deal with other producers to freeze output.

Meanwhile, with sanctions on Iran removed in January, Tehran is keen to increase its production of crude to levels before the restrictions hit exports.

Iran currently produces about 3.1 million bpd of oil. The sanctions also cut crude exports from a peak of 2.5 million bpd before 2011 to just over 1 million bpd in recent years.