Oil jumped before giving up some of the gains as a deal between key producers Saudia Arabia and Russia stopped short of offering an actual limit on output. The US dollar slipped amid bets the Federal Reserve won't hike rates this month.
"Freezing production is one of the preferred possibilities," Saudi Energy Minister Khalid al-Falih said speaking alongside Russian counterpart Alexander Novak at the G20 summit in China, according to Reuters. "But it does not have to happen specifically today."
The comments came ahead of this month's meeting of OPEC member countries and other oil producers in Algiers, where some hope for an agreement to cap output and ease the global glut. Brent crude moved as high as US$49.33 earlier in the session.
"Verbal intervention was again needed to trigger a recovery towards US$50," senior ABN Amro economist Hans van Cleef told Reuters.
"After all, if prices remain too low ahead of the meeting, there is a risk that at some point Russia and Saudi Arabia actually need to act," van Cleef said. "That would probably be the last thing they want as long as Iran is raising output."
In Europe, the Stoxx 600 Index finished the day with a gain of 0.1 per cent from the previous close.
France's CAC 40 index inched 0.01 per cent lower, while Germany's DAX index slipped 0.1 per cent, and the UK's FTSE 100 Index fell 0.2 per cent.
US and Canadian markets were closed for the Labour Day holiday.
After Friday's weaker-than-expected US jobs data fuelled doubts the Federal Reserve will raise interest rates at this month's policy meeting, scheduled for September 20-21, investors will first eye a European Central Bank gathering on Thursday.
"The ECB this week will be the point of focus," Daniel Murray, head of research at EFG Asset Management in London, told Bloomberg. "Absent a large surprise, I suspect it will probably be a neutral meeting-if they do anything, it will be a tweak rather than full-blown action.
Freezing production is one of the preferred possibilities.
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"The jobs report probably reduces the probability of a Fed hike in September, but it wasn't so weak that it detracts from the whole concept of an underlying economic recovery," said Murray.
Meanwhile, a euro-zone Purchasing Managers Index for manufacturing and services dropped to 52.9 in August, down from 53.2 in July and below a previous estimate of 53.3, according to IHS Markit. The slowdown was mainly due to weaker economic growth in Germany, as output in the euro-zone's largest nation rose at the slowest pace for 15 months, IHS Markit noted.
"The survey data will fuel expectations that the ECB would prefer not to wait before injecting more stimulus into the economy, adding pressure for policymakers to act later this week to help shore up confidence in both the outlook for the economy and the bank's commitment to its inflation target, even if simply by extending its QE program," Chris Williamson, chief business economist at IHS Markit, said in a statement.