Crude prices retreated on Tuesday after the big rally on the previous trading day as investors trimmed positions and the Federal Reserve (Fed) saw little need for additional monetary stimulus.

After the steep rise on Monday, crude prices declined after the opening as investors traded cautiously in view of weaker-than- expected factory orders and rising supplies.

According to data from the Commerce Department, U.S. factory orders rose 1.3 percent in February after a revised 1.1-percent decline in January. It fell short of economists' estimates of 1.5- percent increase.

The biggest oil exporter of the Saudi Arabia said on Tuesday that it would continue the record high production level even if the Western countries could tap the emergency reserves. Rising supplies helped conquer fears of oil disruption in Iran and pulled down the prices.

The oil prices escalated declining after the Fed released minutes of its March 13 meeting at 2:00 p.m. saying that "a couple of members indicated that the initiation of additional stimulus could become necessary if the economy lost momentum or if inflation seemed likely to remain below 2 percent". The minutes lowed expectation of more central bank stimulus and weighed heavily on commodities.

Light, sweet crude for May delivery slipped 1.22 dollars, or 1. 16 percent to settle at 104.01 dollars a barrel on the New York Mercantile Exchange. In London, Brent crude for May delivery fell 57 cents, or 0.45 percent to close at 124.86 dollars a barrel.