Oil prices rose on Thursday on expectations the world's leading crude producers will at a meeting later in the day overcome obstacles that have so far prevented a deal to cut output in response to a collapse in global demand.
Brent crude futures were up 2%, or 65 cents, at $33.49 a barrel by 1214 GMT after hitting a high of $34.83 early in the session.
U.S. West Texas Intermediate (WTI) crude futures were up 3%, or 76 cents, at $25.85 a barrel, after earlier hitting a session high of $27.46 a barrel.
Both contracts retraced some of their earlier gains after a Kremlin spokesman said Russian President Putin had no plans as of Thursday to discuss oil markets with U.S. President Donald Trump and Saudi Arabia's leadership.
The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia - a group known as OPEC+ - are set to hold a video conference of oil and energy ministers on Thursday at about 1400 GMT.
Hopes of a deal to cut 10 million to 15 million barrels per day (bpd) rose after reports that Russia was ready to reduce its output by 1.6 million bpd and Algeria's energy minister said he expected a fruitful meeting.
It would be by far the biggest output cut ever agreed by OPEC, but Russia has insisted it will only reduce output if the United States joins the deal.
A source briefed on Saudi Arabia's oil policy said it is ready to cut up to 4 million bpd of its production but only from its record output levels of 12.3 million bpd achieved in April.
Russia has said it wants output to be cut from the January-March levels before Saudi production jumped.
To boost prices, Thursday's meeting will need to be more successful than the OPEC+ gathering in March, when it failed to agree to extend much smaller supply cuts, resulting in Saudi Arabia and Russia pledging to flood the market with cheap oil.
U.S. President Donald Trump said on Wednesday that U.S. oil producers were already cutting production and warned that he had many options if Saudi Arabia and Russia failed to reach a deal.
Following the OPEC+ meeting, energy ministers from the Group of 20 major economies are set to meet.
However, with oil prices having halved since the start of the year and global oil demand forecast to slide as much as 30%, some analysts remain skeptical about how effective an OPEC+ cut would be in shoring up prices.
"Ultimately, the size of the demand shock is simply too large for a coordinated supply cut," Goldman Sachs said in a note. UBS expects oil demand this quarter to fall by about 20 million bpd, down 20% from a year earlier.
"Even if a production-cut agreement is reached, which will surely give prices a short-term boost, we believe the enthusiasm will subside at some point and the reality of the size of the demand imbalance will eventually hit the market," said Rystad Energy's head of oil markets Bjornar Tonhaugen.
U.S. Energy Information Administration data on Wednesday showed crude stocks rose by 15.2 million barrels last week as fuel demand slumped, their biggest weekly rise ever.
(Additional reporting by Sonali Paul and Seng Li Peng; editing by David Clarke and Jason Neely, Kirsten Donovan and Raissa Kasolowsky)