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Brent crude futures lost 31 cents, or 0.39%, to $79.75 a barrel
by 1019 GMT, while U.S. West Texas Intermediate crude futures (WTI)
shed 33 cents, or 0.44%, to $74.43 a barrel.
Brent slipped back below $80 a barrel after settling above the
threshold on Monday for the first time since Dec. 26.
Prices had risen by around 2% on Monday after a Ukrainian drone
strike on Novatek's Ust-Luga Baltic fuel export terminal near
Russia's second city St Petersburg raised supply concerns.
"The attack ... is a timely reminder that a bigger, more
influential war is still raging on," said PVM analyst John
Evans.
Tensions also rose in the Middle East, where U.S. and British
forces carried out a second joint round of strikes on Houthi
positions in Yemen on Monday night.
In Libya, production at the 300,000 barrels per day Sharara
oilfield restarted on Jan. 21 after the end of protests that had
halted output since early this month.
But the returning supply could be offset by ongoing outages in
the U.S. because of extreme cold weather. As much as 20% of
North Dakota's oil output was still shut in on Monday, the
state's pipeline authority said.
The weather-induced shutdowns over the last week could see a
drop in crude inventories in Tuesday's American Petroleum
Institute (API) weekly report, PVM's Evans added.
A Reuters poll suggested that U.S. crude oil inventories would
fall by about 3 million barrels in the week to Jan. 19.
(Reporting by Robert Harvey in London, and Emily Chow and Trixie
Yapp in Singapore; Editing by Kevin Liffey)
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