Thirty-four people were killed in attacks on Brussels airport and a rush-hour metro train in the Belgian capital on Tuesday, according to public broadcaster VRT, triggering security alerts across Europe and bringing some cross-border traffic to a halt.
Oil had risen earlier in the session following a drop in U.S. inventory levels that helped ease some of the concern around oversupply that could dampen future price recoveries.
Libya said it would not attend a gathering in Doha next month intended to help OPEC and major producers outside the cartel to cut a deal to keep output at January's levels.
Brent crude futures
U.S. May crude futures
"It's this 'risk-off' sentiment weighing on prices," Commerzbank strategist Eugen Weinberg said.
Oil's near-50 percent rise in the last six weeks has brought the price to its highest levels so far this year, above $42 a barrel, forcing many of those who were betting against the market to reverse those positions.
"I would't be surprised to see some market participants ... saying the price increase that we've had has been enough, over 30 percent in just a few weeks might be excessive. So in the short term, I wouldn't be surprised to see some profit-taking."
The dollar index <.DXY>, gold
U.S. crude stockpiles at the Cushing, Oklahoma hub fell 570,574 barrels to 69.05 million in the week to March 18, traders said on Monday, citing data from market intelligence firm Genscape.
"Oil and a number of other markets have reached a bit of a pause phase," said Ric Spooner, chief market analyst at CMC Markets.
"For oil we have had a substantial rally. A lot of that has been preemptive in nature, preempting production cuts, and assisted by the weaker U.S. dollar," he said.
Iran has yet to say whether it will join the April meeting, but its officials have made clear Tehran wants to raise exports following the lifting of international sanctions in early 2016.
(Additional reporting by Aaron Sheldrick in Tokyo; Editing by Ruth Pitchford)
By Amanda Cooper