Oil pared gains in post-settlement trading after API data shows big surprise build in U.S. crude stocks.
Brent crude rose 46 cents, or 0.96 percent at $49.63 a barrel, after hitting an intraday high of $51.20. The global benchmark settled more than 3 percent lower on Monday after rallying 20 percent between the beginning of the month and Aug. 19.
U.S. crude's West Texas Intermediate was last up 0.74 percent at $47.76 a barrel, after settling at $48.10 a barrel, up 69 cents, or 1.46 percent. WTI broke a seven-day winning streak in the previous session.
Oil prices had been positive after Reuters reported Iran is sending positive signals that it may support joint action to prop up the oil market, citing sources in OPEC and the oil industry.
OPEC's third-largest producer has been boosting output after the lifting of Western sanctions in January. Tehran refused to join a previous attempt this year by OPEC plus non-members such as Russia to stabilize production, and talks collapsed in April.
Though Iran has not yet decided whether to join a new effort, Tehran appears to be more willing to reach an understanding with other oil producers, the sources said.