"This is a consultative meeting".
Saudi Arabia Energy Minister Khalid al-Falih later stressed the Algeria meeting's objective is "consultative" only.
Mr. Falih said higher oil prices will be needed soon to make investments in new oil projects to satisfy demand.
Oil prices slid Tuesday as investor skepticism grew than the Organization of the Petroleum Exporting Countries would reach an agreement to limit production. That came ahead of weekly inventory reports from industry group the American Petroleum Institute (API) that will be released later on Tuesday, and the U.S. Department of Energy's Energy Information Administration (EIA) that will be published on Wednesday.
Though there is enough doubt over prospects for the deal at this meeting, the situation may force OPEC members to come to an agreement in the immediate future.
Oil prices have more than halved since mid-2014 as a USA shale oil boom prompted a fierce fight with OPEC for market share.
The news send global oil prices down by 2% to 4%.
Analysts said No. 1 crude exporter Saudi Arabia and top producer Russian Federation seem amicable to a freeze but Iran, whose production has stagnated at 3.6 million barrels per day, wants to ramp up to at 4 million bpd first. An effort in April to agree on a production freeze fell apart because Iran refused to participate.
"While a potential deal could support prices in the short term, we find that the potential for less disruptions and still relatively high net long speculative positioning leave risks skewed to the downside into year-end", the analysts said.
But Faleh said Tuesday that "the opinions of OPEC and non-OPEC states are beginning to converge". What are the levels that you're watching at this point?
Given this outlook, Dhar believes it explains why Saudi Arabia seems willing to compromise with other OPEC members to prevent a further delay to rebalancing the market.
The sources added that Iran had not indicated if it would accept the offer.
The Saudi and Iranian economies depend heavily on oil, but Iran is seeing the pressure easing as it emerges from years of sanctions. Only this week, the Financial Times reported that the country's government had decreed a 20% cut to both minister's salaries and bonuses for the country's public service employees. I am personally optimistic about the market. At this stage, the discussions are about freezing (oil production).
"If there is a consensus on one in the next few months, Saudi Arabia will be with the consensus view".
If we don't get any deals by COB in Algiers tomorrow, the early August lows around the low 41's could be in for a visit.