Crude oil prices surged higher on Tuesday amid expectations the Organization of the Petroleum Exporting Countries (OPEC) and allies will decide to deepen production cuts during their meeting this week.
However, oil pared some gains after the surprise move by the Federal Reserve to cut interest rates by 50 basis points to a target range of 1 to 1.25% raised concerns about the economy and the outlook for energy demand.
West Texas Intermediate Crude oil futures for April ended up $0.43, or about 0.9%, at $47.18 a barrel, after having hit a high of $48.66 at one stage.
On Monday, WTI Crude oil futures for April ended up $1.99, or 4.5%, at $46.75 a barrel.
The OPEC and its allies are scheduled to meet this Thursday and Friday in Vienna. Currently, the group is producing 1.7 million barrels less per day.
Crude oil prices gained in strength amid expectations global central banks will announce measures to revive growth.
However, the surprise move by the Federal Reserve to cut rates by as much as 50 basis points, and more importantly, nearly two weeks ahead of the scheduled monetary policy meeting, has raised fears about the magnitude of the impact of the coronavirus outbreak on the global economy.
Meanwhile, traders were looking ahead to the weekly oil reports from the American Petroleum Institute (API) and Energy Information Administration (EIA). The API report is due later today, while the EIA data is due out at 10.30 AM Wednesday.