Crude Oil falls 3 Percent as Investors Reduce Chances of Output Agreement

Crude Oil prices plunged over 3 percent on Friday on a report that Saudi Arabia did not expect OPEC and non-OPEC countries to agree on a plan to curtail production when they meet next week in Algiers.

The news drove U.S. West Texas Intermediate (WTI) lower to $44.92, down $1.40 or -2.90 percent. However, WTI crude is still positioned to close higher for the week. International benchmark Brent crude oil was down $1.33, or -2.80 percent at $46.32 a barrel.

Later today, oil markets could fall further if the Baker Hughes rig count report comes out bearish. Recent data has shown that the number of operating rigs have increased 12 out of the last 13 weeks.

A recovery by the U.S. Dollar helped pressure gold prices on Friday. The news was enough to weaken the market for the session, however, it was expected to close higher for the week. With the Fed not likely to act on interest rates until December, gold will basically follow the momentum in the U.S. Dollar.

Hawkish commentary from Boston Federal Reserve President Eric Rosengren helped drive up the U.S. Dollar against a basket of currencies on Friday. Rosengren helped the Greenback firm after he said he believed U.S. short-term interest rates should be raised now and warned a decline in the jobless rate below sustainable levels could derail economic recovery.

Rosengren has a history of being hawkish. On Wednesday, he was one of three members of the FOMC to dissent at this week’s monetary policy meeting that left rates unchanged at 0.25 to 0.50 percent. Other FOMC members voting against current policy are Kansas City Fed President Esther George and Cleveland Fed President Loretta Mester.

The GBP/USD was down about 1 percent, pressured by negative comments from UK Foreign Secretary Boris Johnson, who said yesterday that the government was in talks to formally leave the European Union as soon as next year.

Losses were limited, however, after comments from Bank of England policymaker Kristen Forbes. She said on Thursday that she saw no case for a further cut in interest rates.

U.S. equity markets were lower on Friday, under pressure from falling crude oil prices. The benchmark S&P 500 Index fell by almost 0.30 percent, mostly on weakness in crude oil.

In economic news, Markit Manufacturing Flash PMI came in at 51.4, below the estimate of 52.1 and lower than August’s reading of 52.0.