"The recent selloff may help reinforce Saudi's cautious stance and delay any production increase," said Stephen Innes, global market strategist at Axi.
"The market's probably right to think at this price level and given what the fundamentals are doing, there'll be more supply coming into the market over time."
"This rally has certainly overshot itself... We are at levels much higher than pre-Covid and demand nowhere near those levels," said Sukrit Vijayakar, director of energy consultancy Trifecta.
The two-year US Treasury yield briefly touched a record low of 0.1049%. Benchmark 10-year yields eased slightly to 1.2771%, pulling away from the highest level since Feb. 27, 2020 as some investors judged that recent selling of fixed income had gone too far.
The Saudi-led coalition fighting the Houthis in Yemen said early on Monday morning it had intercepted and destroyed an explosive-laden drone fired by the Houthis toward the kingdom.
The American Petroleum Institute reported US crude oil inventories fell by 4.3 million barrels in the week to Jan. 29, compared with analysts' expectations in a Reuters poll for a build of 446,000 barrels.
Yet they also felt the pain. Demand for oil evaporated in early 2020 as governments imposed travel restrictions and stay-at-home orders to slow the COVID-19 pandemic's spread.
Britain, in lockdown since Jan. 4, on Wednesday clamped down on travel, requiring people arriving from high-risk COVID-19 countries to quarantine for 10 days and barring outbound trips for all but exceptional reasons.
A seasonal boost to China's gasoline demand that is typically seen during the New Year holidays will be moderated by the tightened restrictions this year, consultancy FGE said in a note.
"Despite this bullish supply agreement, we believe Saudi's decision likely reflects signs of weakening demand as lockdowns return," Goldman Sachs said in a note, although the investment bank maintained its year-end 2021 forecast for Brent of $65 a barrel.