Crude oil pared most of its early decline but still closed below $50 a barrel in U.S. trading on Tuesday. Prices slipped amid fears the swine flu could reduce travel and slow the economic recovery, hurting the prospects of energy demand.

Light sweet crude for June settlement dropped to $49.92, down 22 on the session. Prices fell as low as $48.55 in the early going.

The swine flu outbreak was the focus of an emergency hearing on Capitol Hill Tuesday, as a panel of medical experts addressed the Senate Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies. Experts warned that the situation is likely to get worse before it gets better, calling the outbreak a potential pandemic.

On the economic front, a report from the Conference Board showed that consumer confidence for March rose far more than expected, while a report from Standard and Poor's showed a slowing pace of contraction in home prices in February.

Earlier, the S&P/Case-Shiller 20-City Composite Home Price Index fell at an annual rate of 18.6 percent in February, a modest deceleration from the 19.0 percent drop in prices that was reported for January.

Additionally, the Federal Reserve began its two-day meeting today, although little is expected to come out of the meeting, as the interest rate has already been lowered to a near zero range.

The dollar is uncertain against other majors, slipping against the euro and remaining essentially unchanged versus the pound. The dollar moved off a five-week low set against the yen earlier in the day.

Traders also looked ahead to the Energy Information Administration's weekly inventory report. Experts expect to see inventories were up 1.8 million barrels in the recent week.

Last week, EIA data showed U.S. commercial crude oil inventories increased by 3.9 million barrels in the week ended April 17. Experts were looking for a build of about 3 million barrels for the week. At 370.6 million barrels, inventories are at the highest level in almost 19 years.

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