US oil settles at $48.69 a barrel, down 12 cents, or 0.25%

A pump jack and pipes at an oil field near Bakersfield, California.
Lucy Nicholson | Reuters

Oil prices were slightly higher in choppy trade on Tuesday, with Brent hitting four-month highs on a rally inspired by OPEC plans to tighten output before a surging dollar pared gains.

Weaker equity prices on Wall Street also limited oil's run higher.

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Brent crude was down 14 cents at $50.75 a barrel by 2:40 p.m. ET. It rose to $51.37 at the session peak and its highest since June 10. Earlier, Brent fell to $50.34. after settling on Monday at $50.89.

U.S. West Texas Intermediate (WTI) crude was down 25 cents at $48.56. The session high for WTI was $49.13, its highest since July 5.

The dollar hit a 13-day high against a basket of major currencies on bets for a hike in U.S. interest rates before the year-end.

Oil prices rise post-OPEC deal

"The OPEC deal looks more and more like hot air but oil's still very technically driven," said Stig Rasmussen, a senior proprietary trader at Danske Commodities in Aarhus, Denmark.

"For Brent, the next target is $52.86. I imagine at that point shale oil companies will be hedging bigger volumes for 1-2 years ahead."

U.S. shale producers were hedging future oil output at their highest levels this year, analysts at Morgan Stanley noted on Monday. The rush to hedge came as the calendar 2017 strip climbed to $52.29, its highest since mid-August.

Oil has gained more than 10 percent in five sessions since the Organization of the Petroleum Exporting Countries revived hopes that its members and other major oil producers will contribute to limiting output when OPEC meets on Nov. 30 for its policy meeting.

Tuesday's highs in Brent came after news that a delegation from Iran's energy ministry will visit Russia in October-November to present potential oil deals to Russian companies.

Russian news agency Interfax reported Russian Energy Minister Alexander Novak as saying that experts from Russia and Saudi Arabia would determine a date for the energy ministries' meeting in the near future.

OPEC's target is to bring its production to between 32.5 million and 33.0 million barrels per day by cutting some 700,000 bpd from a glut of about 1.0-1.5 million bpd estimated by analysts.

But a Reuters survey last week showed OPEC output likely reached likely a record high of 33.6 million bpd in September. Individual members of the group such as Iran and Libya have also announced more supply plans.