Oil prices hit a four-month high on Tuesday as investors felt increasingly optimistic about the ability of Organisation of the Petroleum Exporting Countries (Opec) to reach a deal on its first output freeze in eight years.

Brent crude, the global benchmark, rose 0.45 per cent to $51.12 per barrel in late afternoon trading. West Texas Intermediate crude swelled 0.08 per cent to $48.85.

The market has been buoyed by a tentative agreement from the Opec to cut output to between 32.5 million and 33 million barrels a day.

Despite the small losses on Tuesday, prices were up 8.8 per cent since the day before Opec members met in Algeria and discussed the deal last week, according to Wall Street Journal.

Iran, which would be allowed to produce "maximum levels that make sense" as part of the Opec deal, said today that co-operation between Opec members and non-Opec members would play an important part in stabilising oil prices, it added.