Oil jumped more than 5% on Wednesday, after the Saudi oil minister said an agreement among OPEC members on cutting output was close, putting the price on course for its biggest one-day move since April.
Brent crude futures rose $2.72 on the day to $49.10 per barrel by 9:35 a.m. GMT, while U.S. West Texas Intermediate (WTI) crude futures rose $2.43 to $47.66 a barrel.
The Organization of the Petroleum Exporting Countries met at 9:00 a.m. GMT on Wednesday at its headquarters in Vienna to discuss terms of a potential deal to cut production in an effort to prop up prices that have fallen by more than half since 2014 due to oversupply.
Saudi Arabia's energy minister, Khalid al-Falih, said he believed the market's fundamentals were moving in the right direction, but he believed the group was "getting close to a deal."
"The extent of the (price) move shows no one wants to miss the boat. There must be a general consensus that there will be a cut, whether it's going to be bullish, I don't know, but it's the domino effect," PVM Oil Associates analyst Tamas Varga said.
An Iraqi delegate on Wednesday said that some form of agreement would be reached, and Iran's oil minister also said he was optimistic.
Traders said markets were jittery, and that prices could swing sharply in either direction depending on developments in Vienna.
Oil on Tuesday fell by nearly 4% on disputes between Saudi Arabia, Iran and Iraq regarding details of the planned cut.
Analysts at Goldman Sachs, Barclays, and ANZ agree that oil prices will quickly rise above $50 per barrel should OPEC come to an agreement. Without a deal, the consensus is for a fall to the low $40s.
Iran and Iraq are resisting pressure from Saudi Arabia to curtail production, making it hard for the group to reach an agreement on output.
OPEC, which accounts for a third of global oil production, reached a preliminary agreement in Algiers in September to cap output around 32.5-33 million barrels per day versus the current 33.64 million bpd to prop up prices.
One of OPEC's biggest concerns is that by cutting output it will simply cede market share to non-OPEC rivals.