While upside risks to the forecast include constraints to US shale oil output, geopolitical risks in several producing countries, and concerns the United States may not waive sanctions against Iran, downside risks include weaker compliance with the oil producers' agreement to restrain output or outright termination of the accord, rising output from Libya and Nigeria, and a quicker-than-expected rise in shale oil output.
US President Donald Trump is facing a May 12 deadline to decide whether to restart US sanctions against Iran, potentially ending the 2015 deal that halted sanctions in order to end Iran's nuclear program.
Brent crude futures were down 88 cents at $74.76 a barrel by 1108 GMT.
Crude has rallied this month amid heightened geopolitical tensions, and as investors await a decision on the Iran accord.
"That's an issue that is more political in nature that could have a shock in the market", said Mark Watkins, a regional investment manager at U.S. Bank Wealth Management in Park City, Utah".
Oil fell on Monday after a rising rig count in the United States suggested the shale boom is showing no signs of slowing, but prices remain near their highest in more than three years and are set for a second straight month of gains. "Reimposing US sanctions is not a foregone conclusion just yet".
The recent Dollars strength has negatively impacted Gold as the intensity of the USD correction caught most traders by surprise.
A measure of oil market volatility climbed to the highest level in two weeks.
"Although the overall United States oil rig count rose by five, the prolific Permian region saw oil rigs decline by one", Anthony Headrick, energy market analyst and commodities futures broker at CHS Hedging LLC, said in an email.
Money managers hold record positions in Brent crude futures and options, lured in by the hefty premium of the front-month June contract over subsequent months that makes it profitable to invest in crude over the longer term.
Growing U.S. crude production and stockpiles have weighed on the market. Only Russia now produces more, at around 11 million bpd. USA crude production rose by 46,000 BPD the previous week, to 10.59 MMBPD.
USA crude production has soared more than 25 percent since mid-2016 to a record 10.59 million barrels per day (bpd).
The 2018 budget proposal, submitted by President Muhammadu Buhari in November 2017, put the benchmark oil price at $45 per barrel, compared to $44.5 per barrel for the 2017 budget.
In the US, working oil rigs rose by five last week to 825, the highest level since March 2015, according to data from Baker Hughes.