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US oil settles at $44.48 a barrel, down $1.84, or 3.97%

Crude crashes after Saudi announcement

Oil prices fell 4 percent on Friday, paring weekly gains, on a report that Saudi Arabia did not expect an agreement at talks next week among major crude exporters aimed at freezing production.

Crude futures slumped after Bloomberg reported that Saudi Arabia did not expect a decision at Algiers, the capital of Algeria where the biggest oil producers are expected to convene next week for talks, traders said. Bloomberg cited a "delegate" as source, said traders who saw the report.

U.S. oil drilling rig count was up on Friday by 2 to 418, according to Baker Hughes.

Workers on a drill site at the Permian basin outside of Midland, Texas
Brittany Sowacke | Bloomberg | Getty Images

Brent crude oil was down $1.67, or 3.5 percent, at $45.98 a barrel by 2:41 p.m. ET. For the week, it was up 1.6 percent.

U.S. West Texas Intermediate (WTI) crude was down $1.76, or 3.8 percent, at $44.56. On the week, WTI showed a gain of less than 5 percent.

Earlier in the session, Brent and WTI were headed for their largest weekly gain in more than a month, reacting to a Reuters report that Saudi Arabia has offered to reduce production if rival Iran caps its own output this year. The Reuters report was based on sources who were familiar with discussions between the two sides.

Traders and investors were also awaiting a U.S. oil rig count report to ascertain if more drillers were returning to the well pad in the world's largest oil consumer. The weekly report by oil services firm Baker Hughes, due at 1:00 p.m. ET had shown rig additions in twelve out of the last 13 weeks.