Oil futures prices shot higher Tuesday on a report that the Organization of Petroleum Exporting Countries may be close to agreeing on temporary, voluntary production cuts.
However, the gains were trimmed "once traders had a chance to digest the news and realized it was much ado about nothing," said Richard Marose, an analyst in Chicago with Geldermann Inc.
West Texas Intermediate crude oil for delivery in September advanced by 76 cents a barrel at the New York Mercantile Exchange before losing about half of that gain.
In other futures markets, livestock prices retreated from Monday's sharp run-up, Treasury bonds posted strong gains and corn and soybeans were lower.
The oil market, which had been subdued, turned hectic on the news from the OPEC meeting in Geneva that there was some agreement jelling on voluntary curbs. The stated aim was to bring production closer to 17.5 million barrels a day. Current OPEC production is estimated at about 20 million barrels a day.
Further, Saudi Arabia Oil Minister Sheik Ahmed Zaki Yamani said his country would be willing to cut production.
"The market was looking for something it could rally on," said Peter Beutel, an analyst in New York with Elders Futures.