The price of oil fell by over $1, after US President George W Bush announced plans to help counter rising oil prices at the Renewable Fuels Association.
OPEC says it is powerless to reduce oil prices
On Tuesday oil fell to $72.45 a barrel on New York's Nymex, from $73.73 earlier in the day, after reaching a peak of $75.35 on Friday.
Fuel costs have risen recently as fears that Iran's nuclear program fuels geopolitical tensions with the US.
Brent crude also fell, hitting $72.64 from $73.60 in earlier trading.
Gasoline for May delivery dropped 2.7%, reaching $2.115 a gallon, having dipped as low as $2.07 after President Bush made his speech.
Mr Bush said that he would stop topping up the US strategic petroleum reserve in order to increase oil supply to the market, and would encourage hybrid cars and investigate high petrol prices.
However, in the longer term analysts believe that global tensions - particularly between the US and Iran - will continue to push the price of oil highe.
Iran has said it would suspend ties with the United Nations nuclear watchdog if sanctions are imposed.
"The market is reacting today as if oil at less than $74 a barrel is a bargain," said Deborah White of SG CIB Commodities.
"We've had some aggressive statements from Iran again and seen some bullish statements on Chinese demand," added Ms White.
Rising prices have been fuelled in part by increasing demand from China, which rose by 6% in March compared with a year earlier.
Instability in Nigeria has also contributed to higher prices in recent months as production levels have dropped by half a million barrels a day since February.
The Organization of the Petroleum Exporting Countries (OPEC), which meets over a third of world demand, promised to keep pumping oil at near maximum levels, but said it was powerless to pull down high prices.