Oil prices dropped following the doubts about Saudi Arabia’s commitment to abide by the OPEC production reduction pact.
The barrel of light sweet crude fell to $47.72 in contracts for April delivery.
The market went on sale since investors learned a report that the Saudis increased their production in February by more than 10 million barrels per day,”
said Andy Lipow, from Lipow Oil Associates.
This was taken as a bad omen on the future of the supply reduction agreements in force since January, which were adopted by OPEC members and other producers.
OPEC reported on Tuesday that it did cut production in February but at a slower pace than in January.
There are fears that OPEC’s production limitation agreement will be frayed,”
said Matt Smith, from Clipperdata.
Said fears were added to the fact that oil has been in free fall since last week, when the United States announced an increase in its oil reserves that were already at a record level.