Oil prices have dropped due to excess supply, and no sign of a freeze in production.

Brent LCOc1 dropped ten cents to $48.95 a barrel, while US light crude oil CLc1 fell 15 cents to $46.62 a barrel, reported Reuters.

In the first three weeks of this month, oil prices rose by over 20% due to expectations of a potential deal by oil suppliers to cut freeze production levels.

"Speculators pushed the price up on expectations of an output freeze, which is unlikely to happen."

At the International Energy Forum, which will be held in Algeria from 26 to 28 September, the Organization of the Petroleum Exporting Countries members will meet. However, expectations of coming to an agreement among the producers have been dampened due to a record output.

Commerzbank senior oil analyst in Frankfurt Carsten Fritsch was quoted by the news agency as saying: "Speculators pushed the price up on expectations of an output freeze, which is unlikely to happen.

"I see downside risks if those expectations are being scaled back."

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US investment bank Jefferies also stated in a report that even if a production freeze has been agreed, "the effects on the physical market would appear to be minimal."

"We do not expect a production freeze, let alone a production cut, from the OPEC meeting."