Investing.com - Oil prices spiked sharply during European hours on Monday, amid reports that Saudi Arabia and Russia will work together to support the market, fueling hopes of an output freeze.
On the ICE Futures Exchange in London, Brent oil for November delivery jumped to a daily high of $49.15 a barrel, the most since August 30. It was last at $49.04 by 5:10AM ET (09:10GMT), up $2.21, or 4.75%.
Meanwhile, crude oil for October delivery on the New York Mercantile Exchange surged $2.09, or 4.73%, to trade at $46.24 a barrel.
Top oil producers Saudi Arabia and Russia are due to make a joint statement during the G20 summit in China later on Monday calling for cooperation to support the oil market, several sources with knowledge of the matter said.
The sources added that non-OPEC oil producer Russia would likely send a delegation to November's OPEC meeting to discuss an output freeze.
OPEC members are set to discuss a potential production cap at an informal meeting on the sidelines of an energy conference in Algeria between September 26-28.
Oil prices strengthened on Friday after Russian President Vladimir Putin said in an interview with Bloomberg that an agreement between major oil exporters to freeze output would be the right decision to support the market.
His comments followed similar rhetoric from Saudi Arabia's foreign minister Adel al-Jubeir, who reportedly said on Thursday that some sort of a production agreement could be made between OPEC and non-OPEC producers at this month's meeting.
Despite the supportive remarks, chances that the upcoming meeting in late September would yield any action to reduce the global glut appeared minimal, according to market experts. Instead, most believe that oil producers will continue to monitor the market and possibly postpone freeze talks to the official OPEC meeting in Vienna on November 30.
An attempt to jointly freeze production levels earlier this year failed after Saudi Arabia backed out over Iran's refusal to take part of the initiative, underscoring the difficulty for political rivals to forge consensus.
Trade volumes were expected to remain light on Monday, with many investors in the U.S. away for the Labor Day holiday. Trading in oil ends at 1:00PM ET, while U.S. stock markets are closed for trading all day.