The Brent crude price was down 30 cents, or 0.4%, at $76.71 and U.S. West Texas Intermediate (WTI) crude fell 26 cents, or 0.4%, to trade at $72.90 at 0340 GMT.
Both contracts had settled up more than 2% in the previous trading session.
“Oil prices have rebounded somewhat in the last two sessions, so now is time for a pause… with no real positive data coming out,” said Suvro Sarkar, lead energy analyst at DBS Bank.
“The market is cautious today ahead of the inflation data…. With net long positions declining sharply over the last two weeks, a lot of traders are already out of the market, so volumes are low.”
U.S. consumer price inflation figures for April are due on Wednesday.
The Fed raised rates last week in what may be the last hike of its tightening cycle. It dropped guidance about the need for future hikes, with inflationary pressure starting to ease.
U.S. consumers said last month they expected slightly lower inflation in a year’s time, a report from the New York Federal Reserve showed on Monday.
While oil markets fell sharply last week, prices rose on Friday and Monday as fears of recession eased in the U.S., the world’s biggest oil consumer, and some traders saw crude’s three-week slide on demand worries as overdone.
“The oil market was extremely oversold and it will probably continue to stabilise as long as Wall Street is still confident the Fed will cut rates later this year,” Edward Moya, senior market analyst at OANDA, said in a note.
A round of voluntary output cuts by some members of the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, begins this month and the group holds its next meeting on June 4.
“Oil prices won’t be able to rise that much from here given all the growth demand fears, but expectations are high for OPEC+ to try to keep prices above the $70 a barrel level,” Moya’s note said.
Also supporting oil prices, the Canadian province of Alberta declared a state of emergency over the weekend in response to wildfires that have displaced nearly 30,000 people and prompted energy producers to shut in at least 280,000 barrels of oil equivalent per day, more than 3% of Canada’s output.
(Reporting by Katya Golubkova in Tokyo and Emily Chow in Singapore; Editing by Sonali Paul and Edmund Klamann)