Oil prices tumbled 4% on Friday on signs that OPEC producers were making little progress in achieving preliminary agreement ahead of talks by major crude exporters next week aimed at freezing production.
Brent crude futures settled down $1.76, or 3.7%, at $45.89 a barrel. For the week, it rose 0.3%, accounting for gains in the past two sessions. US West Texas Intermediate crude futures fell $1.84, or 4%, to settle at $44.48. WTI gained 3% over the week, Reuters reported.
Also weighing on sentiment was data showing the United States was on track to add the most number of oil rigs in a quarter since the crude price crash began two years ago. Lower equity prices on Wall Street and other world stock markets was another bearish factor.
Crude futures slumped after sources said Saudi Arabia did not expect a decision in Algeria where the Organization of Petroleum Exporting Countries and other big oil producers were to convene for Sept 26-28 talks.
"The Algeria meeting is not a decision making meeting. It is for consultations," a source familiar with Saudi oil officials' thinking told Reuters.
Earlier in the day, the market rallied when Reuters reported that Saudi Arabia had offered to reduce production if Iran caps its own output this year.
Oil prices are typically volatile before OPEC talks and Friday's session was tempered with caution despite market sentiment on a high this week after the US government reported on Wednesday a third straight weekly drop in crude stockpiles.
"A 'No Deal' result in our definition will be one where OPEC not only failed to get an explicit deal out of the meetings, but also failed to develop a forward plan," Macquarie Capital said in a note, referring to the Algeria talks. "This would be another epic fail by OPEC."
