Oil prices rose to their highest level since October on Tuesday as the market priced in a potential output cut led by producer cartel Opec, although analysts warned that a failure to agree a cut could lead to a ballooning supply overhang by early 2017.

International Brent crude futures rose as high as $49.43 per barrel early on Tuesday, their highest since 31 October, and they were trading at $49.33 per barrel at 1:10am GMT, up 43 cents, or 0.9%, from their last settlement.

US West Texas Intermediate crude futures were up 44 cents, or 0.9%, at $48.68 a barrel.

Opec is trying by 30 November to bring its 14 member states and non-Opec producer Russia to agree on a coordinated production cut to prop up the market by bringing production into line with consumption.

"With investors becoming more optimistic about Opec reaching an agreement on production cuts, oil prices should continue to edge higher in trading today," ANZ bank said on Tuesday.

Goldman Sachs said in a note to clients that the chances of an Opec cut had increased as producers needed to react to eroding supply and demand fundamentals, which the bank said "have weakened sharply since Opec announced a tentative agreement to cut production."

Should Opec and other producers, especially Russia, fail to agree a cutback, Goldman said it expected an oil supply surplus of roughly 700,000 barrels per day for the first quarter of 2017.