Oil prices tank as OPEC deal on output cuts disappoints traders

Oil prices tanked early Thursday after OPEC reached an agreement to cap oil production for another nine months at the same level that couldn’t fix the oversupplied oil market this year.

The U.S. oil benchmark fell as much as 5.1 percent from $51.36 to $48.75 on Thursday, underscoring how much speculators had driven up the price based on rumors that Saudi Arabia might persuade its fellow OPEC producers to cut production even deeper than it had in the first five months of the year.

“You have enough people believing all the rumors and you’ll run the price way up,” said John Kilduff, an oil-market analyst and co-founder of Again Capital in New York. “The disappointment registers in the market in the form of heavy selling.” [read more]