A pump jack is seen at sunrise near Bakersfield, California October 14, 2014. REUTERS/Lucy Nicholson

Global oil prices surged as much as 12 percent on Friday after rumors of a possible production-cut deal that would include Saudi Arabia, other OPEC nations and Russia. The average oil price had plunged well below $30 a barrel recently, but is now around $31.

Despite the strong daily gain, oil prices were poised to end the week down as much as 5 percent.

The Organization of the Petroleum Exporting Countries was ready to cooperate on an output cut, the Wall Street Journal cited the United Arab Emirates’ energy minister on Thursday after crude futures settled in U.S. trade.

Many traders were skeptical at first about the report, noting that Venezuela and Russia had tried fruitlessly earlier in the week to stir Saudi Arabia and other major producers into agreeing to output cuts.

However, following a 75 percent price slump since mid-2014 that has led crude prices to more than 12-year lows, many were tending to believe that a rebound was due sooner or later if production tightens or demand picks up.

“We expect declining U.S. oil production, in particular, to drive the oil price back up to $50 per barrel by the end of the year,” Frankfurt-based Commerzbank said in a note.

U.S. crude contracts over the next five years were trading under $50 a barrel on Friday, rising above that level only from November 2021 onwards.

U.S. crude’s front-month CLc1 settled up $3.23, or 12.3 percent, at $29.44 per barrel, hitting a session high of $29.66. It hit a 12-year low of $26.05 the previous day. For the week, it lost 4.7 percent.

Brent’s front-month LCOc1 closed up $3.30 at $33.36 a barrel, having fell below $30 on Thursday. Weekly losses were cut to 2 percent.

Prices extended gains after data indicated an eighth straight weekly drop in the number of U.S. rigs drilling for oil. Oil also got a lift from the rally in global equity markets.

Some cited Monday’s Presidents Day holiday in the United States, saying fewer players wanted a short position in oil ahead of the longer weekend break for the New York crude market.

But others, like Tyche Capital Advisors’ Tariq Zahir, were hoping to profit again from bearish bets once the rally peaks. “It gives me great opportunity to put out new shorts in crude spreads,” he said.

Many expected wilder price swings in coming weeks.

“It’s not a one-way price movement anymore,” said ABN AMRO’s senior energy economist Hans van Cleef. “We will see a period of high volatility.”