Oil prices have risen steadily this year on anticipation that demand would recover, but while the United States and China are rebounding, numerous other countries are not.

"Unless major progress is seen beyond the key industrialized nations such as the U.S., the pandemic factor could require some downward adjustments in global oil demand expectations for this year," said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.

India, the world's second most populous country and currently the hardest hit by COVID-19, reported its worst daily death toll on Tuesday, with large parts of the country now under lockdown amid a fast-rising second surge of contagion.

India's Prime Minister Narendra Modi urged citizens to take precautions to halt the spread of COVID-19, but stopped short of imposing lockdowns.

Restrictions continue to hamper travel worldwide. Hong Kong will suspend flights from India, Pakistan and the Philippines from April 20 for two weeks.

Brent crude settled down 48 cents, or 0.7%, at $66.57 a barrel. During the session it reached its highest since March 18 at $68.08. U.S. West Texas Intermediate (WTI) crude fell 94 cents, or 1.5%, to $62.44.

Crude prices rallied earlier in the session after Libya declared force majeure on exports from the port of Hariga and said it could extend the measure to other facilities, citing a budget dispute.

Hariga is scheduled to load about 180,000 barrels per day (bpd) in April. Libya's production was hit last year after eastern-based forces in that country's civil war blockaded oil terminals.

Overall, oil prices have recovered from historic lows last year spurred by the onset of the pandemic, helped by some demand recovery and huge output cuts by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+. A year ago today, WTI sank to minus-$40 due to a massive glut.

U.S. crude stockpiles were expected to have dropped for a fourth week in a row, falling by about 3 million barrels last week, according to analysts in a Reuters poll.

Industry data from the American Petroleum Institute will be released at 4:30 p.m. EDT (2030 GMT), followed by the government's report on Wednesday.

(Additional reporting by Alex Lawler, Jessica Jaganathan; Editing by Marguerita Choy and David Gregorio)

By Laura Sanicola