Oil gains nearly 1% as traders eye OPEC meeting

Oil production in Azerbaijan

Oil prices moved higher on Tuesday, but quickly came off session highs reached after the U.S. Federal Reserve cut interest rates in an emergency move designed to shield the world's largest economy from the impact of the coronavirus.

The central bank's statement said it was cutting rates by a half percentage point to a target range of 1.00% to 1.25%. Crude futures spiked after the financial stimulus but quickly changed course as traders viewed the Fed's move as a signal that the situation was more serious than many had thought, said Bob Yawger, director of energy futures at Mizuho in New York.

"I think the rate cut was expected to happen this week and while it adds liquidity to the market, it does little to encourage anyone to book a flight anywhere," said Scott Shelton, an energy broker with ICAP in Durham, North Carolina. "I think the market effects are short lived when it comes to the price of oil."

U.S. West Texas Intermediate rose 43 cents, or 0.9%, to settle at $47.18 per barrel. International benchmark Brent crude was 17 cents lower at $51.73 per barrel. 

Both futures contracts rose by more than 3% earlier in the session.

Brent and WTI have rebounded over the past two days after sliding more than 20% from their January peak on signs the spread of the coronavirus had dented fuel demand.

The coronavirus, which originated in China, has spread to more than 60 countries and has killed more than 3,000 people globally. In the United States, about 100 people have tested positive for the virus.