Oil prices rose as much as 2 percent on Friday as OPEC neared a deal to increase output to compensate for losses in production at a time of rising global demand.
Benchmark Brent crude jumped $1.68 a barrel, or 2.3 percent, to a high of $74.73 before slipping to around $74.30 by 1215 GMT. U.S. light crude was $1.00 higher at $66.54.
The Organization of the Petroleum Exporting Countries, meeting in Vienna with non-OPEC oil producers, agreed on Friday to raise production by around 1 million barrels per day (bpd) from July for the group and its allies, an OPEC source said.
But this figure would be nominal, with the real increase smaller because several countries that recently under-produced oil will struggle to return to full quotas while other producers will not be allowed to fill the gap.
The deal looked to be in line with many analysts' forecasts.
Analysts had expected OPEC to announce an increase in production of 500,000 to 600,000 barrels per day (bpd), which would help ease tightness in the oil market but would not create a glut.
Oil prices have been on a roller-coaster ride over the last few years, with the international marker, Brent, trading above $100 a barrel for several years until 2014, dropping to almost $26 in 2016 and then recovering to over $80 last month.
The most recent price rally followed an OPEC decision to restrict supply in an effort to drain global inventories.
The group started withholding supply in 2017 and this year, amid strong demand, the market tightened significantly, triggering calls by consumers for higher supply.
Falling production in Venezuela and Libya, as well as the risk of lower output from Iran as a result of U.S. sanctions, have all increased market worries of a supply shortage.
Another big uncertainty for oil is the escalating dispute between the United States and its trading partners, which could hit U.S. crude oil exports to China.
Asian shares hit a six-month low on Friday as tariffs and the U.S.-China trade battle start taking their toll.
If a 25 percent duty on U.S. crude imports is implemented by Beijing, American oil would become uncompetitive in China, forcing it to seek buyers elsewhere.
Chinese buyers are already starting to scale back orders, with a drop in supplies expected from September.
"If China's import demand dries up, more than 300,000 bpd of U.S. crude will have to find a new destination," energy consultancy FGE said.
(Additional reporting by Henning Gloystein in Singapore; Editing by David Evans)