Oil prices fell sharply late Friday, wiping out much of the week’s gains, after reports that Saudi Arabia is downplaying prospects of a producers deal on output next week.
The key benchmarks Brent crude and West Texas Intermediate (WTI) both lost more than 3 percent in Friday’s trading, as earlier hopes faded for the informal meeting of OPEC producers and Russia in Algiers.
The losses came after Bloomberg reported that an OPEC delegate “familiar with Saudi Arabian policy” said Riyadh did not expect any deal to limit output.
Earlier, the market had been encouraged by another unconfirmed report that the Saudis were talking with Iran about a mutual deal to freeze production.
For the day, US benchmark West Texas Intermediate for delivery in November lost $1.84 cents to $44.48 a barrel in New York trade.
In London, Brent North Sea crude for November delivery shed $1.76 to $45.89 a barrel.
“I think the biggest factor is here that the market does not believe at this point that there could be some sort of agreement surrounding the production freeze by OPEC producers,” said Bart Melek at TD Securities.
Russia and members of the OPEC oil cartel led by Saudi Arabia will attend the International Energy Forum in Algiers beginning Monday, with informal talks on countering the market glut planned for the sidelines of the three-day event.
Traders are uncertain that a deal can be reached on maintaining, much less cutting, current output levels.
Reports that Saudi Arabia, Iran and Qatar met at the OPEC headquarters in Vienna had fueled optimism.
An earlier Saudi-led attempt to freeze output fell apart in April after Iran refused to participate, saying it needed to raise production depleted by years of Western economic sanctions, which were lifted only in January.
