The Organization of the Petroleum Exporting Countries and its allies were discussing the possibility of raising output by 500,000 barrels per day, a source familiar with the discussions told Reuters.
The major producers are scheduled to gather in Algeria on Sunday.
Earlier in the session, prices jumped after a report said that OPEC and non-OPEC countries pumped less oil in August compared with July due to a drop in Iranian crude supply.
"Iranian crude exports are coming (down) earlier and bigger than expected, at a time seasonal demand is strong. With spare capacity also falling sharply, the market remains exposed to supply-induced price shocks," ANZ Bank analysts said in a note to clients.
Investors piled into the trade, betting that OPEC will be unable to compensate fully for the loss of oil from Iran, OPEC's third-biggest producer.
Brent crude oil was up 13 cents at $78.83 a barrel by 11:27 a.m. EDT (1527 GMT) after earlier touching a session high of $80.12. U.S. light crude was up 20 cents at $70.52, after earlier touching a high of $71.80.
Jason Gammel, analyst at U.S. bank Jefferies, said he expects Saudi Arabia to try to keep the oil market adequately supplied into 2019, "but at the cost of spare capacity", a key supply buffer to prevent oil price volatility.
"Spare capacity could fall below 1 percent of demand by year-end if Iranian exports fall below 1 million barrels per day, as now seems likely," Gammel said.
(Reporting by Christopher Johnson in London, Jane Chung in Seoul and Aaron Sheldrick in Tokyo; Editing by Marguerita Choy and David Goodman)
By Jessica Resnick-Ault