Crude Oil Falls 3.6% on Doubts
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Crude oil prices fell nearly 4% on Tuesday on doubts that exporters will honor an agreement to cut production, an accord that led to the biggest rise in oil prices in seven years.
Crude oil for May delivery fell 59 cents, or 3.6%, to $15.92 a barrel on the New York Mercantile Exchange after surging $1.90 on Monday to $16.51. Five months ago, a barrel of crude fetched about $23.
Oil surged 13% on Monday as exporters, including Saudi Arabia, pledged to cut daily output by as much as 1.6 million barrels to boost prices from nine-year lows. Traders are wary because some countries, such as Venezuela, have broken promises in previous years to produce less.
Even if the cuts are made, the world will have too much oil at a time when demand is weak in Asia and stockpiles in the U.S. and Europe are ample.
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