The dollar index closed flat, reversing an earlier decline of 0.3%.
West Texas Intermediate for October delivery rose 65 cents to $48.06 a barrel at 12:10 p.m.
Analysts at Barclays also see any agreement as unlikely and point out that with oil markets oversupplied, refining margins continue to fall and will have to remain low in the coming months to induce the run cuts necessary to help clear excess inventories.
Crude oil is spiking Tuesday morning on fresh rumors of coordinated action from OPEC. Now, prices are once again testing $50, but the rally has lost momentum as disrupted supplies from Nigeria and Iraq threaten to come back online.
The losses were far less acute however compared with the drop on Monday, when prices tumbled by around $1.50 a barrel. Total volume traded Tuesday was about 36 per cent above the 100-day average. Brent futures, the global benchmark, turned higher this afternoon after the Reuters report was released.
"This obviously gives cause for optimism but it's far from concrete action", said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. U.S. new home sales in July saw their biggest year-on-year growth since January 2013, increasing by 31.3%.
Rising stocks indicate weaker demand in the world s top oil consuming nation and add to worries about a global crude supply glut.
A deal would show signs of cooperation from Saudi Arabia's new energy minister after six failed attempts, Goldman analysts including Damien Courvalin said in a report dated August 22.
The idea of a production freeze has repeatedly emerged over recent months even as some of the largest OPEC members are pumping at record levels.
On the crude oil front, US drillers added 10 oil rigs in the week to August 19, the eighth straight week of rig additions, as crude rebounded toward the $50-a-barrel mark that makes drilling viable. As they say they have highlighted before, there was no shortage of headlines in the build up to the last OPEC meeting, so this comes as little surprise and as Deutche Bank have noted, its is their expectation that a coordinated output freeze will have little meaningful fundamental impact anyway. In July, China's exports of gasoline more than doubled from a year ago to 970,000 metric tons, or 230,000 barrels a day.
"We are seeing a little reaction on the API data which has posted higher inventories", said Ric Spooner, chief market analyst at CMC Markets.