Oil prices tumbled 4% today on signs that Saudi Arabia and arch rival Iran were making little progress in achieving a preliminary agreement ahead of next week’s talks by major crude exporters aimed at freezing production.
As Reuters reports, 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.
Brent crude futures decreased $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.
U.S. West Texas Intermediate crude fell $1.84, or 4%, to settle at $44.48.
Crude futures slumped after sources told Reuters that Saudi Arabia did not expect a decision in Algeria where the Organization of the Petroleum Exporting Countries and other big oil producers were to convene for Sept 26-28 talks.
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 today’s session was tempered with caution despite market sentiment on a high this week after the U.S. government reported on Wednesday a third straight weekly drop in crude stockpiles.
