Oil tumbles 4%; Saudi Arabia cools on output freeze

Oil tumbled 4 per cent on Friday to open the second quarter, after a Saudi prince reportedly said the kingdom will not freeze production without Iran and other major producers doing so and data showed the global crude glut was likely to grow.

The dollar's first rebound in a week after stronger-than-expected US jobs data added pressure on oil, making crude prices denominated in the greenback less attractive for holders of the euro and other currencies.

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US employment increased solidly in March and wages rebounded, signs of economic strength that could allow a cautious Federal Reserve to raise interest rates gradually.

Brent crude fell $1.70, or 4.2 per cent, to $39.07 a barrel by 11:29 am ET (1529 GMT). It was on track to a similar loss on the week, after ending the first quarter up 6 per cent and March 15 per cent higher.

US crude fell $1.40 to $36.94 a barrel. It was on track to a 6 per cent drop on the week, after a first-quarter gain of 4 per cent and March rally of 14 per cent.

Oil had rallied for the past six weeks after major producers within and outside the Organization of the Petroleum Exporting Countries (OPEC) floated the idea of freezing output at January's highs.

But Saudi Deputy Crown Prince Mohammed bin Salman said the OPEC kingpin will not join the program without the participation of Iran and other major producers, Bloomberg reported.

Major oil producers are to gather in Doha, Qatar on April 17 to discuss the plan. Iran has steadfastly maintained that it will not contribute to any output freeze until its crude exports return to pre-sanction levels.

"The primary reason that oil prices are being dealt a solid dose of the WBWs (whoop-bang-wallops) today lies with Saudi Prince Mohammed bin Salman," Matt Smith, director of commodities research at Clipperdata, wrote in a commentary. "The King's son threw cold water on hopes of a production freeze." A Reuters monthly survey showed this week that OPEC output rose in March on higher supply from Iran after the lifting of sanctions and near-record exports from southern Iraq.

The market will look out at 1:00 pm ET (1700 GMT) for the weekly US oil rig count data from industry firm Baker Hughes.