Oil prices fell in Tuesday trade, reversing earlier gains after a Bloomberg report cited an official from the Obama administration reiterating that a release of strategic crude reserves was under consideration.
The report sparked a $1 swing in prices after fresh concerns about global supplies had sent crude higher.
U.S. officials have said for months that releasing the reserves was one option to address disruptions in global oil production. Reuters reported earlier in March that Britain was set to work with Washington to tap stockpiles later this year.
Bloomberg quoted Charles McConnell, assistant secretary for fossil energy for the Department of Energy, as saying a release "is being considered".
Oil prices have jumped more than 15 percent this year due to concerns about a potential disruption of Iranian supplies as well as actual production losses from Syria, South Sudan and Yemen.
Rising gasoline prices have become a focus of the U.S. presidential race. President Barack Obama has said his administration was looking at all ways to ease logistical bottlenecks in the United States to ease high fuel costs.
North Sea Brent crude traded down 63 cents at $125.02 a barrel by 11:48 a.m. EDT (1548 GMT), while U.S. crude lost 26 cents to trade at $106.77 a barrel.