Oil jumped as much as four per cent today as the world's largest producers gathered in Algeria to discuss ways to support prices, with nervous trade driving volatility to its highest since a similar meeting to freeze output in April in Doha which failed.
The Organisation of the Petroleum Exporting Countries (OPEC) and other exporters led by number one producer Russia are meeting informally on the sidelines of the International Energy Forum over the next two days to discuss steps to tackle a price-eroding glut of crude.
Key OPEC member Iran, the fourth largest crude exporter which is still trying to recapture output levels it set before Western sanctions in 2012, downplayed the chances of a deal while some OPEC members remained hopeful.
Implied volatility, a gauge of how much oil prices move, was at its highest since 18 April, when the meeting in Doha among OPEC members to discuss an output freeze ended in an impasse, leaving crude at just above $40.
Some analysts believe implementation of a freeze will only be after OPEC's all-important policy meeting in Vienna in November. Until then, the group and non-members, including Russia and leading oil consumer the United States, are likely to ramp up output.
"While we look for both Russia and the OPEC membership to continue to talk up the market via bullish hype whenever crude prices decline by a few dollars a barrel, we are maintaining a view that this type of artificial price support is simply delaying the inevitable by allowing non-OPEC production, especially from US shale producers, to recover further," said Jim Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Associates.