Earlier, there were concerns about supply shortage as an outcome of Trump's sanctions on Iran and war of words which led to oil prices marking a sweeping move to three and a half year highs.
BMI Research said oil markets would "struggle for direction, as uncertainty around both the impact on supply from the Iranian sanctions and escalating trade tensions between the US and China persists".
The battle of wills between Tehran and the Trump administration intensified Monday, as Iranian officials privately admitted they will soon sell discounted oil and gas to Asian customers as they brace for the return of US sanctions. Brent crude, the global benchmark, climbed 1.1% to $73.41 a barrel.
Investors are concerned by the health of the world economy at a time of escalating trade disputes between the United States and its major trading partners.
Last month, global oil supply rise has been recorded at 300,000 bpd where OPEC's production has been increasing rapidly and hit a new 2018 peak in July.
Prices rebounded from the previous session's slide that came as a financial crisis in Turkey sparked fears that possible contagion throughout emerging economies could hurt fuel demand.
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"Discount is part of the nature of the global markets being offered by all oil exporters", IRNA reported the source as saying on Monday.
Hedge funds and other money managers reduced their bullish positions in U.S. crude futures and options in the week ending August 7, data from the U.S. Commodity Futures Trading Commission showed on Friday.
The main driver is expected to be upcoming U.S. sanctions on Iran's energy sector, which kick in come November.
Oil prices slid Monday after inventories at a key United States crude delivery hub jumped last week, adding to demand concerns.
Some have predicted that Iranian output could drop to as low as 700,000 barrels per day (bpd), from 2 million bpd.
"There are lots of variables in the oil market, the most important of which is Iran", said Tamas Varga, analyst at London brokerage PVM Oil Associates.
The overall demand for Opec's crude is now expected to be 32.9 million barrels a day this year, which is around 600,000 barrels a day lower than in 2017.