SINGAPORE (Reuters) - Oil prices rose to their highest level since late October on Tuesday as the market priced in an expected output cut led by producer cartel OPEC, but analysts warned that a failure to agree a cut could lead to a depening supply glut by early 2017.

International Brent crude oil futures rose as high as $49.63 a barrel on Tuesday, up 1.5 percent from the last settlement and the highest since Oct. 31. Brent was trading at $49.58 per barrel at 0525 GMT, up 68 cents, or 1.4 percent.

U.S. West Texas Intermediate (WTI) crude futures were up 69 cents, or 1.4 percent, at $48.93 a barrel.

The Organization of the Petroleum Exporting Countries (OPEC) is trying by Nov. 30 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 0.7 million barrels per day (bpd) for the first quarter of 2017.

(Reporting by Henning Gloystein; Editing by Richard Pullin)