Brent crude oil futures pared gains on Tuesday after Qatar said that four of the world's largest producers agreed to freeze output at January levels, provided that other major exporters followed suit.
Qatari Energy Minister Mohammad bin Saleh al Sada told a news conference that the step would help to stabilise the oil market, which has experienced price declines not seen since the early 2000s because of the pace at which supply has outstripped demand.
Analysts said that while the decision is a step in the right direction to bring supply and demand back into balance, global inventories remain near record levels and are likely to dampen any price rallies.
The oil ministers of Russia and Venezuela attended the meeting in the Qatari capital, together with Saudi Oil Minister Ali al Naimi, who said the group's next steps would be assessed over the coming months.
Brent crude futures were up 81 cents at $34.20 a barrel by 09:25 GMT, having fallen from an earlier peak of $35.55, the highest price since February 4.
US crude futures were up 63 cents at $30.07, off the day's high of $31.53.
"It's really the first supply management decision taken since November 2014, so even though there will be some that will try to discount it and say it's not a cut, it's a change. It is a big change in policy," Petromatrix strategist Olivier Jakob said.
"It's quite typical to have some volatility when (headlines) come out, but I think over the medium term, people will start to review their positions."
Oil prices have fallen by more than 70 percent in the past 20 months, driven down by near-record production both from OPEC members and other producers, such as Russia.
The closed-door meeting indicates the mood may be shifting among producers that have been determined to defend market share rather than prices.
Venezuela's Oil Minister, Eulogio Del Pino, has visited major oil producers in recent weeks to rally support for the idea of freezing production at current levels in an effort to halt the downward spiral in prices, sources have said.
The drop in the oil price has eroded the finances of even the more affluent oil-producing nations, forcing governments to cut spending, increase deficit forecasts, borrow more and push through politically unpopular reforms.
In the meantime, US crude prices could come under pressure as inventories remain close to record levels and US refiners cut back processing runs.
US crude could fall to below $20 as a drop in demand outweighs cuts to output as domestic producers shut wells, BMI Research said in a note.