But a stronger dollar and receding fears of oil supply disruption from Saudi Arabia after an attack on its oil facilities capped price gains.

Brent crude futures for May rose by 32 cents, or 0.5%, to $68.56 a barrel by 0125 GMT, while U.S. West Texas Intermediate (WTI) crude for April rose 19 cents, or 0.3%, to $65.24.

"Fundamentals remain incredibly supportive, especially with Saudi Arabia in full control pursuing a tight oil policy," Stephen Innes, chief global markets strategist at Axi said in a note.

"Brent is currently holding up above $68, suggesting speculators are likely dipping their toes back in after yesterday's chaos."

On Monday, Brent crude oil price rose above $70 a barrel after Yemen's Houthi forces fired drones and missiles at the heart of the Saudi oil industry, including a Saudi Aramco facility at Ras Tanura vital to petroleum exports.

Riyadh said there were no casualties or loss of property and prices ended the day lower.

Still, the United States expressed alarm at "genuine security threats" to Saudi Arabia from Yemen's Iran-aligned Houthis and elsewhere in the region, and said it would look at improving support for Saudi defences.

The attacks came after the Organization of the Petroleum Exporting Countries, Russia and their oil producing allies, known as OPEC+, agreed last week agree on broadly sticking with output cuts despite rising crude prices.

Investor focus, meanwhile, remains on the prospects for a global economic recovery.

U.S. Treasury Secretary Janet Yellen said on Monday that President Joe Biden's $1.9 trillion coronavirus aid package will provide enough resources to fuel a "very strong" U.S. economic recovery.

U.S. crude oil and refined product stockpiles likely fell last week, with distillate inventories seen drawing down for fifth straight week, a preliminary Reuters poll showed on Monday.