Investing.com - Oil futures fell sharply on Friday, paring weekly gains, as sentiment took a hit amid concerns that the upcoming meeting among major oil producers may not yield any action to reduce the global glut.
On the ICE Futures Exchange in London, Brent oil for November delivery sank $1.76, or 3.69%, on Friday to settle at $45.89 a barrel by close of trade.
The contract rallied to $48.26 earlier, the most since September 12, after Saudi Arabia reportedly agreed to trim its production if Iran caps its own output
But prices soon tanked after another report quoted an unnamed Saudi official who cautioned not to expect a deal and that the meeting would be more a chance to consult than reach a formal agreement.
Despite Friday's losses, London-traded Brent futures notched a weekly gain of 12 cents, or 0.26%.
OPEC members, led by Saudi Arabia and other big Middle East crude exporters, such as Iran and Iraq, will meet non-OPEC producer Russia on the last day of the International Energy Forum, which will be held in Algeria Monday through Wednesday.
According to market experts, chances that the meeting would yield any action to reduce the global glut appeared minimal. Instead, most believe that oil producers will continue to monitor the market and possibly postpone freeze talks to the official OPEC meeting in Vienna on November 30.
An attempt to jointly freeze production levels earlier this year failed after Saudi Arabia backed out over Iran's refusal to take part of the initiative, underscoring the difficulty for political rivals to forge consensus.
Elsewhere, on the New York Mercantile Exchange, crude oil for delivery in November plunged $1.84, or 3.97%, to end at $44.48 a barrel.
Market players continued to focus on U.S. drilling prospects, amid indications of a recent recovery in drilling activity. Oilfield services provider Baker Hughes said late Friday that the number of rigs drilling for oil in the U.S. last week rose by 2 to 418, marking the 12th increase in 13 weeks.
For the week, New York-traded oil futures still rose $1.45, or 3.25%, after U.S. crude supplies fell for the third week in a row, boosting the demand outlook in the world's largest oil consumer.
According to the U.S. Energy Information Administration, crude oil inventories fell by 6.2 million barrels last week to 504.6 million, surprising market analysts who expected an increase of 3.35 million barrels.
In the week ahead, oil traders will be awaiting the outcome of the Organization of Petroleum Exporting Countries get-together on Wednesday to see whether a deal can be reached to limit production.
Market participants will also be focusing on U.S. stockpile data on Tuesday and Wednesday for fresh supply-and-demand signals.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Tuesday, September 27
The American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.
Wednesday, September 28
Major global oil producers are due to hold informal meetings on the sidelines of an energy conference in Algeria in order to discuss potential cuts in production quotas.
The U.S. Energy Information Administration is to release weekly data on oil and gasoline stockpiles.
Friday, September 30
Baker Hughes will release weekly data on the U.S. oil rig count.