Oil pares gains on report OPEC experts did not set details of output deal

Kilduff: 'Punishing outcome' without OPEC deal

Oil prices pared gains after a source said OPEC experts ended their meeting on Monday without agreeing on concrete details of a planned reduction in oil output by individual countries.

Details are supposed to be presented to an OPEC ministerial gathering on Nov. 30. OPEC was scrambling to rescue the deal on Monday, with analysts warning of a sharp price correction if the producer group fails.

After falling as much as 2 percent, prices spiked in morning trade as Iraq's oil minister said the country would cooperate with the group to reach an agreement "acceptable to all."

Later in the day, Dow Jones reported Iraq is seeking a production freeze of 4.546 million barrels a day and Iran is considering capping its output at an as-yet unspecified level, citing a source.

Analysts are watching for any sign of support from Iraq and Iran — OPEC's No. 2 and 3 producers, respectively — because both have expressed reservations about the mechanics of output reductions.

Without deal, could oil drag below $40?

Russian President Vladimir Putin and his Iranian counterpart Hassan Rouhani agreed in a telephone call on Monday to coordinate steps on global oil and gas markets, the Kremlin said.

The coordination also included a dialog between Russia and OPEC member countries, the Kremlin said, adding that both men noted the importance of measures taken through OPEC to reduce output as a key factor in stabilizing the world oil market

Brent crude were trading up 77 cents, or 1.6 percent, at $48.01 per barrel by 3:01 p.m. (2001 GMT).

U.S. West Texas Intermediate (WTI) crude futures settled up $1.02, or 2.2 percent, at $47.08 per barrel. They were up 80 cents after the settlement.

Trading turned choppy after prices tumbled more than 3 percent on Friday as doubts grew over whether the Organization of the Petroleum Exporting Countries (OPEC) would reach agreement to help curb global supply overhang that has more than halved prices since 2014.

Market watchers expected prices to remain reactionary until OPEC's Wednesday meeting offers the market a definitive answer as to whether the cartel would make cuts.

"There's going to be speculation until the meeting that makes prices very difficult to predict between now and Wednesday," said Hamza Khan, head of commodities strategy at ING. "Whatever small fundamental news we get will be drowned out by the shouting from Vienna."

Watch Saudi Arabia and Iran ahead of OPEC meeting: Analyst

On Sunday, Saudi Arabian Energy Minister Khalid al-Falih said that he believed the oil market would balance itself in 2017 even if producers did not intervene, and that keeping output at current levels could therefore be justified.

The statement stoked simmering disagreement between OPEC and non-OPEC crude exporters such as Russia over who should cut production by how much..

A meeting scheduled for Monday between OPEC and non-OPEC producers was called off after Saudi Arabia declined to attend, while concerns over the feasibility of a deal pushed the crude oil volatility index close to a nine-month high.

Others warned that even if some form of an output restriction is announced after producers meet in Vienna on Wednesday, the details matter greatly.

"Do not take an announcement of a headline cut of 1 million barrels per day (bpd) at face value. It could still imply an OPEC production level considerably in excess of 33 million bpd, depending on developments in Libya and Nigeria and the speed and rigour of compliance," David Hufton, managing director of brokerage PVM Oil Associates Ltd said in a note.

Even if a cut is agreed, oversupply may not end soon.

The U.S. oil rig count rose by three last week, and Goldman Sachs said that "since its trough on May 27, 2016, producers have added 158 oil rigs (+50 percent) in the U.S."

— CNBC's Tom DiChristopher contributed to this report.