Oil prices jumped as much as 2 percent on Tuesday, reversing early losses, after Reuters reported that Iran was sending positive signals that it may support joint OPEC action to prop up the market.
Brent crude was up 87 cents, or 1.8 percent, at $50.03 a barrel by 1502 GMT). It had fallen 1.4 percent earlier to $48.48.
US crude jumped 70 cents, or 1.4 percent, to $48.11.
Iran, the third-largest oil producer in the Organization of the Petroleum Exporting Countries, has been boosting output since the lifting of Western sanctions in January and refused in April to join an OPEC production freeze plan.
Though Iran has not officially announced whether it will join a new effort to curb production at a meeting of OPEC and other producers in September, Tehran appears to be more willing to reach an understanding on the matter, sources in OPEC and the oil industry said.
Venezuelan Oil Minister Eulogio Del Pino recently toured oil-producing countries including Saudi Arabia and Iran to rally support for a deal. Despite rising this year, oil at around $49 a barrel is less than half its level of mid-2014.
“Iran is reaching its pre-sanctions production level soon and after that it can cooperate with the others,” said a source familiar with Iranian thinking after del Pino’s visit to Tehran.
“In general, Iran prefers more actions from the OPEC side rather than just freezing at the maximum production level of all members. If this freezing issue helps prices to improve, Iran by positive words of support, will help.”
Members of the Organization of the Petroleum Exporting Countries are due to meet informally in Algeria next month on the sidelines of the International Energy Forum. Russia is also expected to attend the IEF.
Venezuela, whose economy has been hit hard by the oil price collapse, has for months sought to rally producers toward an agreement to limit production. Del Pino was in Tehran on Aug. 15 before flying to Jeddah.
Iran confirmed its participation in the OPEC meeting in Algeria, an OPEC source said on Tuesday.
Russia, which in April was ready to freeze production, now wants to see an internal agreement among OPEC before it commits to rejoining an initiative.
“Negotiations are ongoing. I see positive signs coming from OPEC ‘majors’,” said a senior industry source familiar with the discussions, referring to Riyadh and Tehran.
“Russia wants to see an OPEC agreement before committing anything. So (OPEC members) are busy among themselves formulating an agreement.”
OPEC sources say Iran’s participation in a production pact has been the main stumbling block in reaching a deal.

Source: Arab News