Oil prices sunk to four-year lows following reports Saudi Arabia, OPEC's largest oil producer, is cutting its prices for customers in the U.S.

By late Tuesday morning London time, a barrel of benchmark crude was down $2.07, or 2.6 percent, at $76.79, its lowest level since September 2010. Meanwhile, Brent crude, the international benchmark, was down $2.14, or 2.5 percent, at $82.63 a barrel, its lowest level since October 2010.

Oil prices have fallen much of this year amid concerns over the global economic recovery as well as excess supplies. The strength of the dollar has also weighed on prices as it makes oil more expensive for international investors.

Fawad Razaqzada, an analyst at Forex.com, says the Saudi report does "not bode well for the future of the cartel."