Crude futures aimed higher Tuesday, rebounding from a steep drop in the overnight session as investors await a volatile trading day ahead of the Federal Reserve's policy statement.
Light, sweet crude for September delivery recently traded 55 cents, or 0.7%, higher at $81.86 a barrel on the New York Mercantile Exchange, rebounding from a 10-month low of $75.71 hit in early electronic trading.
Brent crude on the ICE futures exchange traded 43 cents higher at $104.17 a barrel.
Oil prices rebounded in what market watchers predict could be a rollercoaster trading session Tuesday. After a 6.4% drop Monday sparked by Standard & Poor's downgrade of the U.S. debt rating and fears of a second recession, analysts were cautious about cheering a relief rally.
"We've had so many consecutive down days now, it's natural to see a bounce," said Matt Smith, an oil analyst with Summit Energy. Still, he cautioned that the market is "very fragile," and could see further selling if comments from the Fed later Tuesday fail to inspire confidence.
The stock market opened higher Tuesday after the Dow Jones Industrial Average suffered the steepest one-day drop since the depths of the financial crisis in 2008.
The Dow was recently up more than 1%, while the Standard & Poor's 500 rose 1.2% to 1,133.11.
Oil has taken its cues from stocks in recent days, with equities serving as indicator of expectations for the broader economy. Slower-than-expected growth in the second quarter has spread concerns about further weakness through the rest of the year.
Any slowdown in the global economy would lower demand for oil and other industrial commodities.
While S&P's downgrade of the U.S. was mostly expected, the action triggered a loss of confidence in governments to help the economy toward a full recovery.
On Monday, Bank of America-Merrill Lynch analysts said a mild recession could send U.S. oil prices as low as $50 a barrel.
Oil futures are down more than 15% this month, but traders said Tuesday's bounce will be short-lived without a signal from the Fed that it plans to take action.
"The way prices are falling, especially on stock exchanges, they are likely to keep falling until the Fed unveils some new program," said oil-research firm Cameron Hanover in a research report.
Front-month September reformulated gasoline blendstock, or RBOB, recently traded 3.04 cents, or 1.1%, higher at $2.7220 a gallon. September heating oil recently traded 1.44 cents higher at $2.8161 a gallon.
Light, sweet crude for September delivery recently traded 55 cents, or 0.7%, higher at $81.86 a barrel on the New York Mercantile Exchange, rebounding from a 10-month low of $75.71 hit in early electronic trading.
Brent crude on the ICE futures exchange traded 43 cents higher at $104.17 a barrel.
Oil prices rebounded in what market watchers predict could be a rollercoaster trading session Tuesday. After a 6.4% drop Monday sparked by Standard & Poor's downgrade of the U.S. debt rating and fears of a second recession, analysts were cautious about cheering a relief rally.
"We've had so many consecutive down days now, it's natural to see a bounce," said Matt Smith, an oil analyst with Summit Energy. Still, he cautioned that the market is "very fragile," and could see further selling if comments from the Fed later Tuesday fail to inspire confidence.
The stock market opened higher Tuesday after the Dow Jones Industrial Average suffered the steepest one-day drop since the depths of the financial crisis in 2008.
The Dow was recently up more than 1%, while the Standard & Poor's 500 rose 1.2% to 1,133.11.
Any slowdown in the global economy would lower demand for oil and other industrial commodities.
While S&P's downgrade of the U.S. was mostly expected, the action triggered a loss of confidence in governments to help the economy toward a full recovery.
On Monday, Bank of America-Merrill Lynch analysts said a mild recession could send U.S. oil prices as low as $50 a barrel.
Oil futures are down more than 15% this month, but traders said Tuesday's bounce will be short-lived without a signal from the Fed that it plans to take action.
"The way prices are falling, especially on stock exchanges, they are likely to keep falling until the Fed unveils some new program," said oil-research firm Cameron Hanover in a research report.
Front-month September reformulated gasoline blendstock, or RBOB, recently traded 3.04 cents, or 1.1%, higher at $2.7220 a gallon. September heating oil recently traded 1.44 cents higher at $2.8161 a gallon.
