As Fi­nance Min­is­ter Colm Im­bert and his team of tech­nocrats get ready to make the en­er­gy price as­sump­tions on which the 2017 bud­get will be based, they are di­gest­ing news that US oil prices fell by al­most 3.5 per cent yes­ter­day, head­ing for their sharpest week­ly loss since Jan­u­ary.

The de­cline in oil prices came as in­vestors fo­cused on a grow­ing glut from US crude stock­piles, even as they brushed aside talk that OPEC might freeze pro­duc­tion.

En­er­gy mon­i­tor­ing ser­vice Gen­scape's re­port of a 714,282-bar­rel draw­down at the Cush­ing, Ok­la­homa, de­liv­ery point for US crude fu­tures dur­ing the week end­ed on Au­gust 30 did lit­tle to bol­ster sen­ti­ment, traders said.

In­vestors fo­cused in­stead on Wednes­day's gov­ern­ment da­ta show­ing a 2.3 mil­lion-bar­rel build in US crude stocks in the last week, more than dou­ble what the mar­ket had ex­pect­ed. In­ven­to­ries of dis­til­lates, which in­clude diesel and heat­ing oil, rose near­ly 10 times as much as fore­cast, the da­ta from the US En­er­gy In­for­ma­tion Ad­min­is­tra­tion showed.

"The high US in­ven­to­ry da­ta sug­gest over­sup­ply will re­main for longer than ex­pect­ed," said Hans van Cleef, se­nior en­er­gy econ­o­mist at ABN AM­RO Bank NV in Am­s­ter­dam.

"On top of that, an­tic­i­pa­tion of a high­er dol­lar if the Fed starts to hike rates is neg­a­tive for oil prices. And there's al­so un­cer­tain­ty about the like­li­hood of OPEC/non-OPEC ac­tion at the end of the month."

Brent crude fu­tures for No­vem­ber fell US$1.35, or 2.88 per cent, to US$45.52 a bar­rel.

US crude fu­tures were down US$1.54, or 3.45 per cent, to US$43.16 a bar­rel, mark­ing a three-week low. It's the worst set­tle since Au­gust 11, with a close of US$43.49. Nat­ur­al gas fell 10 cents to US$2.79 per 1,000 cu­bic feet.

Both Brent and WTI were down more than 8 per cent week-to-date for their biggest de­cline since mid-Jan­u­ary.

Oil prices rose as much 11 per cent in Au­gust, post­ing their best month­ly re­turn since April, on spec­u­la­tion that the Or­gan­i­sa­tion of the Pe­tro­le­um Ex­port­ing Coun­tries and oth­er pro­duc­ers might agree on curb­ing out­put at Sep­tem­ber 26-28 talks in Al­ge­ria. Rus­sia is al­so ex­pect­ed to at­tend the IEF. But many in­vestors doubt OPEC will be able to agree a com­mon po­si­tion on pro­duc­tion and prices have fall­en in re­cent days. Many past ef­forts to re­strict pro­duc­tion have failed and OPEC is re­spon­si­ble for on­ly around 40 per cent of world out­put.

"There is still lots of cor­rec­tion po­ten­tial, giv­en the over­hang of spec­u­la­tive long po­si­tions and ex­ag­ger­at­ed hopes for an out­put freeze," said Com­merzbank oil an­a­lyst Carsten Fritsch.

Sau­di For­eign Min­is­ter Adel al-Jubeir said yes­ter­day that OPEC and non-OPEC oil pro­duc­ers were in­creas­ing­ly mov­ing to­wards a com­mon po­si­tion.

"I think there is a move to­ward a com­mon po­si­tion, to­ward a com­mon ef­fort," he told an event in Tokyo.

"If you want to have an im­pact then all of us have to shoul­der the re­spon­si­bil­i­ty, and I be­lieve over the past five or six months, I be­lieve that there has been an in­creas­ing re­al­iza­tion that this is a col­lec­tive ef­fort," Al-Jubeir said.

But many an­a­lysts are skep­ti­cal.

"Talk is cheap," Har­ry Tchilin­guiri­an, glob­al head of com­mod­i­ty mar­kets strat­e­gy at BNP Paribas, told Reuters Glob­al Oil Fo­rum. "Re­al­i­ty will set in and the mar­ket will re­al­ize that the agen­das of var­i­ous OPEC pro­duc­ers are not aligned."