Updated from 12:22 p.m. EST
Crude oil prices slipped below $30 a barrel on Monday for the first time in more than a month as traders liquidated their long positions on expectations that the
Organization of Petroleum Exporting Countries
would decide to increase production on March 27.
"Basically, we're in meltdown mode," said Tim Evans, senior energy analyst at
Pegasus Econometric Group
. "The market was caught long."
The April crude oil contract, which expires Tuesday, fell $1.42 Monday to close at $29.49 a barrel, the lowest level since mid-February. Gasoline futures closed down 5.03 cents to 88.40 cents a gallon.
Crude oil had reached $34.13 a barrel on the
New York Mercantile Exchange
just two weeks ago as inventories shrank and concerns mounted that OPEC would not raise production for the second quarter when it meets in Vienna on March 27.
Evans said he now expected OPEC nations to raise production by 1.7 million barrels a day, and Mexico and Norway to each increase production by 125,000 barrels a day.
Tom Bentz, an analyst and trader at
, said that comments from Venezuela indicated that "OPEC would be careful not to raise too little."
He added that he expected to start seeing an increase in inventories during the second quarter, when demand usually drops.
Analysts said there would be support for the May crude oil contract at $26.80 a barrel and then at $26 a barrel, the level reached on Feb. 9. Gasoline is seen testing the 88.20-cent-a-gallon support level over the next day or two.