US benchmark West Texas Intermediate for May delivery was down 52 cents at $40.93 while Brent for May was 43 cents lower at $41.36.
“Oil prices are pulling back as the market reaction to the Brussels attacks was not as adverse as expected,” Bernard Aw, market strategist at IG in Singapore, told AFP.
“The impact of terror activity on financial markets has lessened substantially in recent years. Economies and markets have a tendency to adjust and desensitise to such events over time.”
Daniel Ang, investment analyst at Phillip Futures, said: “We continue to believe that price movements are continually influenced by the current global oversupply.
“Fundamentals should still be bearish in the immediate term and we continue to believe that cuts to US production would be key further down the road.”
He said there may be some price volatility if top OPEC and non-OPEC members agree on a production freeze when they meet in Doha on April 17.
But he added that a mere production freeze at January levels would not be enough to sustain an uptrend in oil prices, which are now more than 60 percent off a mid-2014 peak due to excess supply and slowing world demand.
“There have to be cuts to production if higher prices were to be favoured,” he said.
WTI rose last week above $40 for the first time since December, boosted by a sharp drop in the dollar which generally makes crude less expensive. Renewed optimism that producers would strike a deal to freeze output also buoyed prices.
OPEC’s secretary-general Abdalla el-Badri said in Vienna on Monday that 15 or 16 nations would join the Doha talks.
He said he expects crude to see a “moderate” bounce after the talks.