Oil rose back above $88 a barrel today ahead of a meeting of the US Federal Reserve that is widely expected to cut interest rates.
US light, sweet crude futures gained 24 cents a barrel to $88.10 earlier today. It fell 42 cents on Monday, its second straight day of losses, on forecasts for warmer weather that will curtail US winter demand for oil.
London Brent crude rose 21 cents to $88.25 a barrel.
The US central bank is expected to opt for a modest quarter percentage point interest rate cut later today as traders said a batch of solid US economic data had eased the need for more aggressive action.
Oil prices have slumped nearly $11 from their record high in November on concerns that a US economic slowdown and steep fuel costs could cut demand in the world's top consumer.
Oil has received some support from weather conditions, however, with dense fog slowing US crude oil imports along Texas waterway.